Africa-Press – Namibia. The Ministry of Finance is considering zero rating value-added tax (VAT) on some essential goods as part of wider efforts to provide sustainable support to low-income families and improve the targeting of social grants.
Executive director Michael Humavindu says reviewing VAT could provide a more sustainable way of helping vulnerable households.
“Maybe we need zero rating on some of the VAT goods that are used daily by poorer households instead of giving someone cash. So I think it’s for all of us as Namibians to think as to how do we support those issues,” he says.
This comes as the ministry looks at new measures to tighten the targeting of social grants to ensure public funds reach the most vulnerable households, having identified gaps in the system.
“We have realised there are households that actually benefit from the social grants, but there are also extremely needy households that don’t benefit anything,” Humavindu says.
He says the ministry is considering introducing means and asset testing to address these imbalances. He also questions whether the current model of uniform payments is the most effective.
“Do we just have to give every household a N$600? Or are there other means of supporting poorer households, given the fact that I mentioned earlier that 22% of the national population, household population, is now poor,” he notes.
The remarks come as the ministry proposed N$7.2 billion for social grants under vote nine of the 2025-2026 appropriation bill.
On broader fiscal planning, Humavindu says the ministry is also focusing on expenditure reviews to improve efficiency.
The first reviews will cover priority areas.
“It is also tied to the zero budgeting aspect. But if we take some of the critical ones, health, education, agriculture, for example, and really do a serious expenditure review of where does that money goes, we might realise where we can do some saving and help them reorganise the budget for greater impact,” he says.
Humavindu says the exercise will start this year.
“The ministry intends to start that public expenditure review this year, hopefully with two or three. And then with that we want to roll this out to at least up to 10 sector votes,” he says.
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