NCCI applauds Shiimi for listening
Company tax break welcomed
Although not all recommendations made to government to create a pro-growth environment have been addressed, the NCCI says the finance minister's announcements are positive and welcomed by a beleaguered private sector where many businesses are still struggling to recover following the past two disruptive years.
Staff Reporter - The national business sector representative body the Namibia Chamber of Commerce and Industry (NCCI) says that advice proffered to government over the years has all too often been conveniently ignored.However, the chamber lavishly praised finance minister Iipumbu Shiimi for embracing the private sector’s recommendations.
“This is a good start,” says NCCI chief executive, Charity Mwiya.
In the medium-term budget review (MYBR) presented by Shiimi in parliament on Tuesday the minister announced that the non-mining company tax rate will be reduced by two percentage points, one percent annually over the two outer years of the next MTEF.
Although it remains higher in comparison to neighbouring countries, effectively the tax rate reduces to 31% in the 2024/25 and to 30% in 2025/26 fiscal years.
“But as NCCI recommended to government previously and repeated earlier this year, further reductions are required to achieve taxation parity with other countries in the SADC [Southern African Development Community] economic bloc,” Mwiya says.
‘COMMENDABLE DEVELOPMENTS’
She also applauded government for committing to undertake an assessment of the consideration to increase the threshold for income tax on individuals from the current N$50 000 to N$100 000 with a view to provide relief to low-income earners.
The NCCI’s CEO says government fast tracking the implementation of a Business Rescue Fund is another commendable development.
Shiimi announced that the fund’s launch is slated for November when the procurement process for a pool of business rescue consultants will start. Initially the fund’s focus will be Development Bank of Namibia (DBN) clients, but it will be broadened to include other lending institutions, by a further allocation of funds in the 2023/24 fiscal year.
OTHER RECOMMENDATIONS
Although not all recommendations made to government to create a pro-growth environment have been addressed, the Mwiya says Shiimi’s announcements are positive and welcomed by a beleaguered private sector where many businesses are still struggling to recover following the past two disruptive years.
Concerning other recommendations, she says NCCI asked for the write-off of the prescribed debt of road users.
She says despite indications that amendments will be made to the Road Fund Administration (RFA) Act to facilitate such write-offs, reportedly bureaucracy is the cause of a delay.
Although voluntary registrations should still be accommodated, the NCCI also recommended that compulsory registration for value added tax (VAT) be applied to businesses with an annual turnover exceeding N$1 million.
Asked about NCCI’s other concerns that must be addressed to make Namibia’s environment more business friendly, Mwiya says consideration should be given to introducing a lower business tax rate for small enterprises with an annual turnover not exceeding N$2 million.
Based on feedback received from members, guidelines for the issuance of Good Standing Certificates was submitted to the Namibia Revenue Agency (NamRA) with an aim to improve tax compliance.
Mwiya says it is her fervent hope the responsiveness demonstrated by Shiimi will be emulated by NamRA, and going forward by other public sector entities who serve the business community.