Taxed to death
In their report titled ‘Quarterly Economics and Fixed Income 1Q 2019: What Lies Ahead in 2019?’, Simonis Storm Securities (SSS) said during recessions, among the economic steps to be taken are to reduce interest rates, increase government spending and reduce taxes.
However, despite the deep recession that Namibia finds itself in, it said, “we are in an environment where fiscal and monetary policies cannot be adjusted to address the slowing growth”.
“The reality is that the government is consolidating; further tax policies are being proposed and monetary policy is expected to tighten,” SSS said in its report, while reiterating that market confidence remains low, and predicting positive economic growth of 0.7% in 2019.
SSS also expects government revenue to drop by 4.2%, 8.2% and 12.6% to N$54.3 billion, N$52.9 billion and N$53.6 billion in the financial years 2018/19, 2019/20 and 2020/21, respectively, on the back of sluggish VAT collection, lower South African Customs Union (SACU) revenues and declining income taxes on individuals and companies.
In 2018, Business Tech reported in 2018 that only 30% of South Africa’s population pays taxes, while in Namibia this figure is only 24%. What this effectively means is that 24% of the Namibian population subsidises the other 76%, who simply contribute to state coffers through VAT payments etc.
Effectively, the tax burden is spread too thin, which means that the few have the massive task of shovelling money into the state, while the rest shirk their responsibilities or earn too little to make a meaningful contribution.
In April last year it was reported that government had managed to collect about N$1.4 billion in outstanding taxes out of an initial figure of N$4 billion owed by companies, which excludes penalties and fines.
The obvious inference to be drawn is that loyal taxpayers are at the receiving end of filling gaping holes in our fiscus. A shocking amount of money gets subtracted from employees each month that should rather have been used to create wealth. Slowly but surely, they are being taxed to death.
However, despite the deep recession that Namibia finds itself in, it said, “we are in an environment where fiscal and monetary policies cannot be adjusted to address the slowing growth”.
“The reality is that the government is consolidating; further tax policies are being proposed and monetary policy is expected to tighten,” SSS said in its report, while reiterating that market confidence remains low, and predicting positive economic growth of 0.7% in 2019.
SSS also expects government revenue to drop by 4.2%, 8.2% and 12.6% to N$54.3 billion, N$52.9 billion and N$53.6 billion in the financial years 2018/19, 2019/20 and 2020/21, respectively, on the back of sluggish VAT collection, lower South African Customs Union (SACU) revenues and declining income taxes on individuals and companies.
In 2018, Business Tech reported in 2018 that only 30% of South Africa’s population pays taxes, while in Namibia this figure is only 24%. What this effectively means is that 24% of the Namibian population subsidises the other 76%, who simply contribute to state coffers through VAT payments etc.
Effectively, the tax burden is spread too thin, which means that the few have the massive task of shovelling money into the state, while the rest shirk their responsibilities or earn too little to make a meaningful contribution.
In April last year it was reported that government had managed to collect about N$1.4 billion in outstanding taxes out of an initial figure of N$4 billion owed by companies, which excludes penalties and fines.
The obvious inference to be drawn is that loyal taxpayers are at the receiving end of filling gaping holes in our fiscus. A shocking amount of money gets subtracted from employees each month that should rather have been used to create wealth. Slowly but surely, they are being taxed to death.
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