As Consumers Get VAT Reprieve
By Kuvee Kangueehi
President Hifikepunye Pohamba yesterday announced a zero-rate tax on beans, cooking oil and fat, and bread and cake flour as a remedial measure to address the economic plight of Namibian citizens.
The zero-rating means consumers will not be expected to pay 15 percent VAT on these food items once the Value Added Tax Act of 2000 has been amended by Parliament.
The announcement comes after last Tuesday’s Second Special Cabinet Meeting, which extensively discussed the increasing food prices locally and abroad.
At the meeting, Cabinet also decided to strengthen the capacity of the Namibian Fish Consumption Promotion Trust in order to expand the distribution of fish throughout the country.
Pohamba said this measure would not only promote fish, as a source of food, but it will also provide protein and thereby improve nutrition for the nation.
Cabinet also resolved to expand the Namibian School Feeding Programme to cover non-boarding schools in the rural areas and townships.
The President said the school-feeding programme has several beneficial spin-offs, including higher school attendance rates, improved learner concentration and educational outcomes as well as better health for the children.
Pohamba called on the Ministry of Trade and Industry to sensitise retailers to encourage them to introduce the zero-rating on the prescribed items and moderate their profit margins.
Cabinet further resolved that the Government should urgently develop strategies to increase food production in the country.
“This is extremely important because escalating food prices have forced some cereal producing countries to ban exports and have reduced the availability of cereals on the world market,” the President said.
He warned that should the trend continue, countries that import cereals such as Namibia would be adversely affected if measures are not put in place to address this development.
“I wish to point out that zero-rating on the items is intended to benefit the nation and should be passed on to the consumers and not be used as a means for undue profits,” Pohamba warned.
This is the second time that the Government has abolished VAT on certain food items. In 2003/4 VAT was abolished on mahangu and maize flour, which are the staple food for the majority of the people.
The Government in the same year put in place a measure to buy domestic cereal products first before approving import permits for these products.
Another measure was the introduction of 40c subsidy per litre of milk. This was approved last year to protect Namibian milk producers.
Pohamba appealed to all Members of Parliament to ensure that the debate on the Amendment Bill is as short as possible so that the Bill can be passed speedily in order to address this difficult situation.
The President made the announcement at a press conference in the capital yesterday.