'Going will get tough over MTEF'
Finance minister Calle Schlettwein and leaders in the private sector discussed post-budget issues during a breakfast meeting.
Ogone Tlhage
The going over the medium-term expenditure framework (MTEF) will be tough, but unpopular choices had to be made, finance minister Calle Schlettwein said on Friday.
“The going is tough and there were some tough choices to be made. The fiscal consolidation programme had to be maintained,” Schlettwein said reflecting on the mid-term budget over a breakfast engagement hosted by PwC Namibia, Liberty Life Namibia, Standard Bank Namibia and Namibia Media Holdings (NMH).
Schlettwein, a former trade minister, suggested that a change in the formulation of the Southern African Customs Union (Sacu) revenue sharing formula may become necessary.
Schlettwein also suggested that the government and the agricultural industry also encourage further value addition by not exporting live cattle on the hoof to South Africa, saying up to 90% in value was lost as a consequence.
Measures to look at further beneficiating the beef sector lower down the ranks in terms of value by not only placing emphasis on high-value meat usually destined for Scandinavian and European Union export markets was key to him.
Schlettwein indicated that the government would take concerted steps towards reducing the debt-to-GDP ratio to bring it in line to the set threshold of 35%. Namibia's debt-to-GDP currently stands at 42%. While Schlettwein admitted that it was high going by the standards set by international ratings agencies for a upper-middle-income country, Namibia's external debt stock still remained below the African average of 50%.
Asset requirements
With changes in domestic asset requirements on the horizon, Standard Bank Namibia economist Naufiku Hamunime welcomed the development saying foreign direct investment flows were often heavily geared toward the primary industries, with little or no emphasis towards developing the secondary and tertiary industries of the economy.
She however raised disappointment at the fact that just 1% of the budget would be allocated towards the ministry of industrialisation, which she said was key in driving the industrialisation agenda of the country.
Hamunime also criticised budgetary allocations that were heavily focused on the wage bill, to the construction and renovation of government buildings which she said affected government's allocation toward the development budget.
Tax
In its post-budget review, PwC Namibia noted that no mention was made on the much spoken about solidarity tax, the zero rating of value-added taxes, and tax on capital gains.
Following a revision in spending priorities, personnel expenditure will now account for 50% of the budget, a 5% upwards revision. Subsidies and other current transfers also enjoy a 5% boost, with 12% of the budget geared towards that purpose while borrowing costs have increased to 12%, up 4%.
Schlettwein is set to introduce a motion on the reintroduction of a presumptive tax on the informal economy before the National Assembly closes for the year, a development welcomed by PwC country manager Nangula Uandjaa.
The going over the medium-term expenditure framework (MTEF) will be tough, but unpopular choices had to be made, finance minister Calle Schlettwein said on Friday.
“The going is tough and there were some tough choices to be made. The fiscal consolidation programme had to be maintained,” Schlettwein said reflecting on the mid-term budget over a breakfast engagement hosted by PwC Namibia, Liberty Life Namibia, Standard Bank Namibia and Namibia Media Holdings (NMH).
Schlettwein, a former trade minister, suggested that a change in the formulation of the Southern African Customs Union (Sacu) revenue sharing formula may become necessary.
Schlettwein also suggested that the government and the agricultural industry also encourage further value addition by not exporting live cattle on the hoof to South Africa, saying up to 90% in value was lost as a consequence.
Measures to look at further beneficiating the beef sector lower down the ranks in terms of value by not only placing emphasis on high-value meat usually destined for Scandinavian and European Union export markets was key to him.
Schlettwein indicated that the government would take concerted steps towards reducing the debt-to-GDP ratio to bring it in line to the set threshold of 35%. Namibia's debt-to-GDP currently stands at 42%. While Schlettwein admitted that it was high going by the standards set by international ratings agencies for a upper-middle-income country, Namibia's external debt stock still remained below the African average of 50%.
Asset requirements
With changes in domestic asset requirements on the horizon, Standard Bank Namibia economist Naufiku Hamunime welcomed the development saying foreign direct investment flows were often heavily geared toward the primary industries, with little or no emphasis towards developing the secondary and tertiary industries of the economy.
She however raised disappointment at the fact that just 1% of the budget would be allocated towards the ministry of industrialisation, which she said was key in driving the industrialisation agenda of the country.
Hamunime also criticised budgetary allocations that were heavily focused on the wage bill, to the construction and renovation of government buildings which she said affected government's allocation toward the development budget.
Tax
In its post-budget review, PwC Namibia noted that no mention was made on the much spoken about solidarity tax, the zero rating of value-added taxes, and tax on capital gains.
Following a revision in spending priorities, personnel expenditure will now account for 50% of the budget, a 5% upwards revision. Subsidies and other current transfers also enjoy a 5% boost, with 12% of the budget geared towards that purpose while borrowing costs have increased to 12%, up 4%.
Schlettwein is set to introduce a motion on the reintroduction of a presumptive tax on the informal economy before the National Assembly closes for the year, a development welcomed by PwC country manager Nangula Uandjaa.
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