Solidarity Tax still under consultation – Schlettwein

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Windhoek

Government is still investigating the introduction of the proposed Solidarity Tax in the 2016/17 budget that would see income-generating citizens above a specified threshold make contributions towards a fund dedicated to poverty eradication.

Speaking to New Era from Nairobi, Kenya, where he is on official duty, Finance Minister Calle Schlettwein said “the consultation process is still ongoing.”

In earlier reports Schlettwein said government hoped to collect up to N$600 million a year from the new tax. During his Mid-Year Budget Review in the National Assembly, he said those earning over N$78 000 a year would contribute to the poverty alleviation fund, whereas those with incomes below N$78 000 would benefit.

“For the financial year 2016/17, I intend to investigate the feasibility of introducing a solidarity tax payable by all individuals in the tax-paying brackets and all registered companies as a citizens’ response to the national fight against poverty,” said Schlettwein.

“The solidarity tax will be introduced as a progressive withholding tax on income at a graduated scale for individuals, and a flat amount levied from juristic persons. We used the average per capita income for Namibia as indicative threshold to determine who should contribute and who should benefit,” said Schlettwein during his Mid-Year Budget Review.

Meanwhile, Minister of Presidential Affairs Frans Kapofi recently denied that there is a fixed time-frame for the introduction of the proposed tax. “Solidarity tax is something mooted, not something immediately on the cards, [there is] no time-frame given for implementation,” Kapofi said when he addressed the media at State House on November 24.

In addition, during President Hage Geingob’s recent interview with the BBC’s Hardtalk he dismissed talk of a universal solidarity tax: “We did not say solidarity tax, we are looking at the disparity which you greatly talked about… we are one of the most unequal countries, so it is a thing of how to narrow that gap.”

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