The government plans to diversify and optimise its revenue sources from existing tax and non-tax sources, Minister of Finance Saara Kuugongelwa-Amadhila said this week.
For the financial year 2008/9, it is expected that 41% of total revenue will come from the country’s share in the SACU customs pool.

“Therefore, reforms at SACU, the creation of a SADC Customs Union and the free trade arrangements with other economic blocs such as the Economic Partnership Agreement between SADC and the EU, pose serious risks on revenue,” said the finance minister.
Kuugongelwa-Amadhila said, to compensate for these anticipated revenue losses, new income streams are being investigated by the government.
The measures include the broadening of the domestic tax base and improving tax administration.
“In addition, it is foreseen that increased trade volumes resultant from trade liberalisation could improve revenue through consumer based taxes and with that offset losses,” she said.
She said the introduction of taxes on interest earning from Unit Trusts is an example of broadening the tax base. Apart from generating additional income, this measure also improves the equitability of the country’s tax laws.
The finance minister said, to further shore up compliance with the law, forensic tax audits were extended to Windhoek Region in October 2006 and will continue throughout 2008/9.
She said the effect of these audits can be observed in the improved tax collections, especially on Income Tax and Value Added Tax. The exercise will be rolled out to other regions until it covers the whole country.
Kuugongelwa-Amadhila said the amendments to the VAT and Income Tax Act will also strengthen collections by closing loop holes used to avoid taxes and by reducing the cost of compliance.
“In accordance with requirements of the Southern African Customs Union, SACU Ministers of Finance agree on excise and equivalent customs duties on imported goods. The following percentage increases were implemented with effect from 20 February 2008: Clear Beer 7.0%, Unfortified wine 7.3%, Fortified wine 7.4%, Sparkling wine 9.9%, Spirits 11.0%, Alcoholic Fruit Beverages 7.0%, Cigarettes 10.8%, Cigarette tobacco 5.2% and Pipe tobacco 5.3% and Cigars 5.3%,” she said.