Reflections on the National Budget 2025/26

Firstly, I would like to congratulate the Minister of Finance, Honourable Erica Shafudah on her maiden budget speech. From our perspective as an agency established to support the government's economic development agenda, the NIPDB welcomes the budget, and we deem it to be a demonstration of the government’s deliberate drive to positively transform the Namibian economy.A key factor in boosting a country’s competitiveness is the political will to create a conducive and progressive business environment. This budget reflects the government’s commitment to fostering an environment that supports investment and drives overall business growth. The 22.6% increase in the development budget to N$12.8 billion is encouraging as it represents an investment in the Nation’s future growth abilities, as opposed to simply funding expenses. This is a positive development for Namibia, especially considering that in the past, no budget was allocated for development.The budget also brought good news and relief for pensioners, who can now withdraw up to N$375 000 per year from their retirement funds tax-free, an increase from the previous N$50 000. With this new approach, they will only be taxed on amounts withdrawn above N$375 000 in any given tax year. As Namibia entrenches herself in the digital space, the government is introducing initiatives to level the playing field by introducing a value-addition tax (VAT) levy on the International Digital Economy. In this regard, digital platform operators will be liable for VAT on supplies of services and intangibles that non-resident online suppliers make through their platforms to Namibian residents. VAT challengesThe move to address the VAT challenges related to digital trade is necessary not only from the perspective of generating revenue to finance sustainable development and strengthen domestic resource mobilisation after the Covid-19 pandemic but also to minimise competitive distortion between foreign online sellers and local physical stores. As an agency mandated to promote Namibia as an investment destination, we are encouraged by the initiative to gradually decrease the corporate income tax (CIT), a move which will enhance the country's investment attractiveness. Further to the decline in the CIT for non-mining companies to 30% effective for years of assessment beginning on or after 1 January 2025, the CIT will decline further to 28% during the 2026/27 financial year. Further to that, we are looking forward to the finalisation of the Special Economic Zones (SEZ) regime as well as the annual turnover threshold for SMEs to enable them to benefit from the corporate income tax rate of 20% to be proclaimed under the proposed SEZ regime. The initiative will position Namibia to attract quality, sustainable investments while fostering private sector development. Shafudah also highlighted allocations in infrastructure development that are critical to investments, including the upgrading of the railway network and completion of ongoing road construction projects, and rural feeder roads to schools and clinics. Increasing the transport networks across the country will support development and economic activities in even remote areas of our country. It is important to note that a safe, stable and expanding rail network is critical for industrialisation, particularly as rail transport is more affordable than road transport for bulk cargo. This will cut logistic costs and enable the establishment of a robust manufacturing sector.In the same vein, the funds allocated to the green schemes and the irrigation at Neckartal Dam will boost investments in the agriculture sector, create agro-processing inputs and in turn reduce the country’s dependence on imports, supporting food security. We further commend the government for the allocation of N$ 350 million to a contingency fund - as it enables the country to build resilience and protection against unforeseen negative circumstances. The NIPDB stands ready to collaborate with the government to drive economic growth by implementing the relevant initiatives outlined in the budget, as well as the SWAPO Party Manifesto.

Reflections on the National Budget 2025/26

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Allgemeine Zeitung 2025-06-10

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Reflections on the National Budget 2025/26

Kommentar

Allgemeine Zeitung 2025-06-10

Bitte melden Sie sich an, um einen Kommentar zu hinterlassen

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