Orphans’ tax scrapped

GOVERNMENT has decided against introducing an orphans’ tax to sustain its Orphan and Vulnerable Children’s (OVC) Fund.

Cabinet said in a statement yesterday that introducing such a levy would affect indirect taxation and would involve the drafting of additional cumbersome institutional and legislative requirements. In 2002, Cabinet instructed the then Finance Minister Nangolo Mbumba to establish an OVC fund and to introduce a levy to support it.During the 2003-04 financial year an allocation of N$10 million was made from the Contingency Fund to get the OVC fund off the ground – but to date the fund has remained stillborn.It is estimated that the country has approximately 115 000 orphans – about 12 per cent of the estimated population of children under the age of 15 in 2001.Roughly two-thirds are deemed to have been orphaned as a result of HIV-AIDS.Only about 14 000 of these children are registered in the Ministry’s database.Yesterday, Finance Permanent Secretary Calle Schlettwein said introducing another tax would undermine the current taxation system and that aid to orphans should be budgeted for.Schlettwein said there was undoubtedly “a great need” to assist orphans, but that the country did not want to hike taxes.”We want to avoid the proliferation of dedicated earmarked taxes.There is a need to budget for it [assistance to orphans].The need has to be funded out of what is available,” he told The Namibian.At its meeting on April 27, Cabinet resolved that the OVC fund should be supported through the annual budget allocation to the Ministry of Women Affairs and Child Welfare.Finance Minister Saara Kuugongelwa-Amadhila said that considering that the orphan crisis was a national problem, all Cabinet members should play their role in lobbying for assistance from the business and other sectors.”A number of institutions, non-governmental trusts and churches outside the Government sphere are also already actively involved in combating the fight against HIV-AIDS and Government’s responsibility and role should be considered against this background,” said the statement.Last month, Minister of Women Affairs and Child Welfare Netumbo Nandi-Ndaitwah said that there was not sufficient available funds to pay orphans a support grant.In 2002, Cabinet instructed the then Finance Minister Nangolo Mbumba to establish an OVC fund and to introduce a levy to support it.During the 2003-04 financial year an allocation of N$10 million was made from the Contingency Fund to get the OVC fund off the ground – but to date the fund has remained stillborn.It is estimated that the country has approximately 115 000 orphans – about 12 per cent of the estimated population of children under the age of 15 in 2001.Roughly two-thirds are deemed to have been orphaned as a result of HIV-AIDS.Only about 14 000 of these children are registered in the Ministry’s database.Yesterday, Finance Permanent Secretary Calle Schlettwein said introducing another tax would undermine the current taxation system and that aid to orphans should be budgeted for.Schlettwein said there was undoubtedly “a great need” to assist orphans, but that the country did not want to hike taxes.”We want to avoid the proliferation of dedicated earmarked taxes.There is a need to budget for it [assistance to orphans].The need has to be funded out of what is available,” he told The Namibian.At its meeting on April 27, Cabinet resolved that the OVC fund should be supported through the annual budget allocation to the Ministry of Women Affairs and Child Welfare.Finance Minister Saara Kuugongelwa-Amadhila said that considering that the orphan crisis was a national problem, all Cabinet members should play their role in lobbying for assistance from the business and other sectors.”A number of institutions, non-governmental trusts and churches outside the Government sphere are also already actively involved in combating the fight against HIV-AIDS and Government’s responsibility and role should be considered against this background,” said the statement.Last month, Minister of Women Affairs and Child Welfare Netumbo Nandi-Ndaitwah said that there was not sufficient available funds to pay orphans a support grant.