Fallout over 2% tax
The government's idea of a “voluntary” additional tax to fund drought-relief efforts has gone down like a lead balloon.
24 May 2019 | Economics
Prime Minister Saara Kuugongelwa-Amadhila is set to meet labour unions today to discuss the tax.
If implemented, all salary earners will be required to pay a one-off tax of 2% of their basic salaries.
Asked what government will do if its appeal does not yield the desired results, finance minister Calle Schlettwein said legal instruments are available.
“Of course all policy options are on the table which are needed to step up the revenue to satisfy the needs of our citizens. We are not begging to get off the hook; we believe in individual responsibility. If that does not work there are legal instruments that are available,” he said.
Schlettwein said the response from Namibians to the 2% voluntary contribution is a sad indication that we have become a society that has lost its compassion and appreciation of solidarity and the concept of an unequal society.
“It looks like we changed into a materialist one, which has lost that desire to make a valuable contribution to those who do not have enough,” he said.
He also said government realised that in an economy which is under pressure, and where growth has disappeared, tax reform is not the most stable way to generate revenue.
The finance minister added they hope to collect between N$500 and N$600 million from the civil servants alone, based on the current wage bill.
Critics called on the government to rather reduce size of the cabinet.
“We reject this proposed idea and call upon government to cut its bloated cabinet including State House decorated and over-glorified so-called advisors, and then this country will have enough money to last a decade and get this economy working again (sic),” said National Unity Democratic Organisation (Nudo) secretary-general Joseph Kauandenge.
“The president must lead from the front and stop with his expensive taste of how he runs government, starting with cutting his neverending foreign trips. After all, charity begins at home and nowhere else,” Kauandenge added.
According to him, the idea belongs in the dustbin. The newly established Landless People's Movement shared Nudo's sentiments.
“We as LPM feel that the 2% could have been a good initiative. However, the application of the 2% across the board does not augur well.
“All of a sudden we are all treated as equals but when the SME Bank money, the Kora Awards, GIPF looting occurred, fishing quotas and mass housing shambles, all Namibians did not benefit equally,” said its deputy leader, Henny Seibeb.
He offered suggestions how the government could cut costs, starting with the size of the cabinet.
“Relieve all deputy ministers of their duties and save on salaries, benefits and subsistence and travel allowances. Eliminate the vice-president position as there is already a prime minister. These layers are top-heavy and serve more as bureaucratic impediment rather than adding value,” Seibeb said. Seibeb also suggested that the number of parliamentarians in the National Assembly be reduced from 96 to the original 72.
“Namibia is a small country and there is no logic as to why we need such a huge parliament. The initial proposal of 96 members of parliament was conceived out of patronage and not out of real fast-tracking of development,” he said.
Trade Union Congress of Namibia president Mahongora Kavihuha questioned the sanity of the person that came up with the proposed tax.
“This idea is irresponsible and childish,” said Kavihuha.
He suggested that the government look at its spending patterns, citing a recent handover of school furniture in the Kunene Region by President Hage Geingob, where he said hundreds of government vehicles were seen.
According to him, this example showed that the government was not managing its resources well.
According to Kavihuha, Tucna is gathering support from civil servants to have the idea shot down.