Tax net should not choke families

12 July 2018 | Columns

Considering the massive job losses that continue to haunt the formal employment sector, the informal sector has become even more critical for the survival of Namibian families.

A Namibia Statistics Agency report, released in 2016, showed that Namibia has 589 787 households, of which 53.6% were headed by males and 46.4% by females.

It goes without saying that many households are dependent on those who make their money from the informal sector, so any attempt to broaden the tax net to scoop more from them, besides indirect taxes like VAT, will be viewed with suspicion and trepidation.

Undeterred, the finance ministry's pamphlet campaign, calling for informal traders to honour their tax obligations or face the consequences, on the presumption that they earn more than N$50 000 a year, is showing a head of steam.

The pamphlet warns explicitly that hair salons, whether operated in a city centre, town, informal market, incubator centre or at home, are subject to tax.

The same applies to taxi and bus transport businesses, as well as hawkers, whether they sell their products door-to-door, at an open market, on the side of the road, under a tree, in a neighbourhood, or from the boot of a car.

Also among those targeted are plumbing services and kapana sellers, who were informed “if you roast meat and sell it, you are required to pay tax on such income”.

While it may be government's right to broaden its tax base, we are concerned about the impacts on already vulnerable Namibians, who have had little or nothing to do with the pillaging and looting contests that have been the order of the day in government ministries.

Also, it is beyond comprehension that government spending, mostly on wages, pomp and ceremony, continues to siphon the fiscus dry.

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