Minister of finance and public enterprises Iipumbu Shiimi on Wednesday tabled the biggest annnual budget Namibia has seen, with projected government spending in the 2024/25 financial year amounting to N$100,1 billion.
He said this comes after a strong revenue performance over the past year.
Shiimi, however, said there would be no new tax policy proposals, but old-age and disability grants would be increased from N$1 400 to N$1 600 a month, and public service employees would be getting a pay increase of 5%.
“We maintained a policy stance to not consider new tax policy proposals,” Shiimi said.
“This budget continues specific tax policy proposals aimed at providing relief to taxpayers and boosting domestic demand,” he said.
One of the standout tax reforms is a substantial increase in the income tax threshold for individuals – from N$50 000 to N$100 000.
“This action will result in an injection of N$646 million directly into the pockets of taxpayers,” Shiimi said.
Corporate income tax rates are set to see a phased reduction, starting at 31% in January, and reaching 28% by the 2026/27 financial year.
“These proposed reforms on corporate income tax are expected to ensure revenue enhancement through improving corporate tax compliance.”
Shiimi said amendments to tax laws would eliminate non-resident shareholder tax exemptions for foreign insurance company shareholders.
The budget allocates N$44,3 billion to the social sector, reflecting a 12% increase from the previous year.
“Investments in the social sectors remain imperative for a developing economy like Namibia,” the minister said.
The economic and infrastructure sector will receive N$20,9 billion, and provisions include support for transportation, agriculture and small and medium enterprises.
“This budget reflects a comprehensive strategy to stimulate economic growth, address social challenges, and ensure fiscal sustainability,” Shiimi said.
The government’s spending plans will result in a budget deficit of N$8,9 billion – equivalent to 3,2% of the country’s gross domestic product – in 2024/25, Shiimi also announced.
Debt servicing obligations will require N$12,8 billion in spending, which is equivalent to 14,2% of expected government revenue in 2024/25.
The government’s income during 2024/25 is projected to total N$90,4 billion, Shiimi said.
- Read more in the next edition of The Namibian.
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