Africa-Press – Namibia. NAMIBIA upped its revenue collection by N$200 million between April and July this year as compared to the corresponding period in the previous financial year when the country grappled with the impact of Covid-19.
Namibia Revenue Agency (Namra) spokesperson Stephen Ndorokaze says the total revenue collected between April and July stood at N$20,4, compared to N$20,2 billion in the previous financial year.
Ndorokaze says the attained figure translates to 42% of the total tax revenue target of N$48,8 billion for the current financial year.
“The greater revenue collection is significant and vital for the attainment of the set revenue target for the financial year,” he says.
Namibia’s Covid-19 cases spiked as of mid-May due to the outbreak of the Delta virus variant locally.
Omu Kakujaha-Matundu, economist and University of Namibia academic, says despite improved revenue generation, expenditure may have increased due to the Ministry of Health and Social Services requesting up to N$500 million in additional funding.
The health ministry’s request is expected to be addressed during the budget review in October.
Kakujaha-Matundu says the country’s budget deficit is still pegged at 9,7%, given the N$48 billion targeted revenue against the total anticipated expenditure of N$72,1 billion.
In real terms the generated revenue stands at a shortfall of about 30%, he says.
“So we expect the budget deficit to balloon further. Debt servicing could become a serious issue, as the economy is going to struggle for a number of years, and tax revenue could dwindle even further,” he says.
Kakujaha-Matundu says the government would have to either cut some essential services or run at a higher deficit.
“Coupled with expected reduction in Southern African Customs Union (Sacu) receipts, the situation could be dire. So the slight improvement predicted in this year’s collection is nothing to write home about,” he says.
Sacu revenue for the current financial year has decreased from N$22,3 billion in 2020/21 to an estimated N$14,8 billion.
This represents a 33,7% decline.
According to the Deloitte budget report, the total debt is estimated at 68,8% and debt servicing is estimated at N$7,7 billion, reflecting the elevated cost of borrowing for 2021/2022.
Revenue is estimated to decline by about N$3,4 billion in the 2021/22 financial year relative to the previous one.
The expected decline is mainly induced by a reduction in Sacu receipts and company taxes.
Total estimated expenditure for the year amounted to N$72,1 billion.
This comprises 91,3% in the operational expenditure execution rate, and 82,2% in development budget spending rate.
Budgeted expenditure for 2022 stands at N$67,9 billion against budgeted revenue of N$55,5 billion.
