Windhoek-Minister of Finance Calle Schlettwein has saids the country has achieved a commendable tax-to-Gross Domestic Product (GDP) revenue collection ratio, which averaged 34.3 percent in the past three years, seen against the global average of about 16 percent.
With the GDP at about N$160 billion – as of 2015/16 figures – that means Namibia is able to collect about N$54,9 billion in taxes.
Tabling the Namibia Revenue Agency Bill in the National Assembly on Tuesday, Schlettwein said if SACU revenues were excluded, the national Tax-to-GDP collection ration stands at an average of 23.2 percent, which compares favourably with the rest of the world.
Nevertheless, he was quick to say the high Tax-to-GDP ratio should not be celebrated as just yet, because the country still has to improve its speed of tax assessments, audits, refunds and adopt new technologies for greater efficiency.
He was telling parliamentarians about the rationale of the proposed Namibia Revenue Agency.
“While we have been able to achieve better revenue collection outputs relative to the region and deal with ethical matters, raised in the ordinary course of business of tax administration and trade facilitation fanctions, we can improve in the speed of tax assessments, audits, refunding and adaptation of technocentric provision of efficient taxpayer services, including the provision of effective taxpayer education,” he said.
He reminded MPs that Namibia is a resourced-based economy, which comes with associated complexity in terms of potential illicit financial ouflows, transfer pricing, profit shifting and other tax base-eroding and tax evading activities.
“These functions require specialised skills which could not be best optimised in the public service environment due to constraints on the acquisition of specialised skills,” he said.
“Operational efficiency is a standard which we aspire to achieve, while timely provision of quality taxpayer services is a function which should not be compromised,” Schlettwein told Parliament.
At the same time, he said, public revenue should be collected fairly and broadly, to ensure that all potential taxpayers contribute to public revenue and to enhance the State’s capacity to provide public services to all Namibians and to invest in public infrastructure.
Regarding the establishment of the Namibia Revenue Agency, Schlettwein said the main rationale establishing it would be to inject a critical mass of appropriate and specialised skills needed to carry out the functions of a modern revenue administration and trade facilitation office.
He said the proposed Revenue Agency would also improve operational efficiency of the Revenue and Custom and Excises offices. He further told legislators that the proposed agency would transform the existing Department of Inland Revenue and the Directorate of Customs and Excise into a semi-autonomous revenue agency.
Altogether, he said, these departments comprise about 79 percent of the total staff complement of the Ministry of Finance. Schlettwein further explained that the agency would be headed by a commissioner, appointed by the minister on accounts of skills and experience, as well as meeting the fit and proper requirement.
He said in order to attract the requisite skills needed for the functions of a modern revenue office, the NRA will be exempted from the Public Service Rules and Public Enterprises remuneration guidelines.
“To further avoid compromising on the skills needs of the agency, there will be no automatic transfer of existing staff of the department of Inland Revenue and Customs and Excise to the new institution,” he said, adding that such staff will be offered the first opportunity to apply and compete for the job offered by the agency before opening it to the public.