www.pwc.com.na Safari Court Hotel & Conference Centre March 2017 Stronger Together Namibia Budget Review 2017/2018
Budget Review 2017/2018 01 02 03 04 Key Focus Areas Numbers in the Budget Tax Comparisons Tax Reforms 2
Key Focus Areas 3
Key Focus Areas Maintaining Pro-growth Fiscal Consolidation: Making Impact where it Matters 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 Macroeconmic Fundamentals & Fiscal Buffers Inclusive Growth & Economic Diversification Poverty Eradication Harambee Prosperity Plan Improved Public Service Delivery 4
Public Finance Reforms 1 2 3 4 5 6 7 Mid-Year Budget Review Macro- Economic Modelling Public Procurement Act PPP Legislation Public Finance Management Bill Civil Service Wage Bill Public Expenditure Reviews 5
Namibian Economic Statistics Caiundo Unemployment at March 2017 Inflation at January 2017 Tombua Cahama Opuwo ANGOLA NAMIBIA Tsumeb Khorixas Okakarara Mavinga Rundu ZAMBIA Kataba Sesheke Luiana Livingstone Kongola Tsau ZIMBABWE 28.1% 1.3% 8.3% N$ 12.96 Omaruru Windhoek Walvis Bay Maltahöhe South Atlantic Ocean Lüderitz Epata Gobabis Aranos Aroab Ghanzi Mamuno Kang BOTSWANA Tshabong Kuruman Orapa Gaborone Mafikeng Karasburg Upington Kimberley GDP Growth USD: NAD Exchange Rate NAMIBIA 0 50 100150 Kilometers Springbok Bitterfontein SOUTH AFRICA De Aar Victoria West 0 50 100 150 Miles 6
The Numbers 7
-N$9bn -N$6bn -N$4bn N$ in Billions N$51.5bn N$61bn N$56.4bn N$62bn N$57bn N$61bn Revenue vs. Expenditure 70 60 50 40 30 20 10 0-10 2016/17 2017/18 2018/19-20 Revenue Expenses Deficit 8
Debt Stock as % of GDP N$71.67bn N$75.22bn 2017/2018 2019/2020 42% 9
N$ billions Tax Revenue vs. Non-Tax Revenue 80 70 Non-Tax Revenue N$2.66bn 60 50 2017/8 N$56bn 2016/7 N$51bn 40 30 N$56bn N$53.38bn Tax Revenue 20 10 2017/8 10
Total Tax Revenue (N$ 53.38 billion) Customs & Excise 37% Income taxes 36% Withholding Taxes 1% Property Taxes 1% VAT 26% 11
N$ in Billions SACU Receipts 25 20 N$19.597bn N$17.978bn N$18.891bn 15 N$14.071bn 10 5 0 2016/17 2017/18 2018/19 2019/20 12
N$ billions Spending Comparison 2017/8 N$62.5bn 80 70 60 2016/7 N$61.5bn 50 40 30 20 10 2017/8 13
Expenditure Execution Rates 100% 97.50% 96.40% 94.60% 80% 60% 40% 20% 0% 14
Top 10 Budget Allocations Education, Arts & Culture Finance Health & Social Services Defence Ministry of Safety & Security Transport Poverty Eradication & Social Welfare Higher Education, Training & Innovation Agriculture, Water & Forestry Urban & Rural Development 6.51 5.68 5.02 3.72 3.28 3.07 2.87 1.95 9.1 11.98 0 2 4 6 8 10 12 14 N$ in Billions 15
Top 10 Budget Cuts Electoral Commission N$86m National Assembly Urban & Rural Development Works Labour & Related Agriculture, Water & Forestry Higher Education, Training & Innovation National Planning Commission Environment & Toursim International Relations & Cooperation N$68m N$669m N$151m N$24m N$338m N$432m N$22m N$39m N$65m 0% 20% 40% 60% 80% 100% 16
Spending Priorities Public Safety & Order Improved Public Administration 1 2 3 4 Education Basic & Higher Economic & Infrastructure Development 17
Infrastructure Development Water & Storage Infrastructure Road Projects 16% Railway Projects Mass Land Serving N$9bn Port Development SME Development 18
Social Sector Investment N$12bn Ministry of Basic Education & Culture 48% N$6.5bn Ministry of Health & Social Services N$27bn N$3bn Ministry of Poverty Eradication 19
Tax Comparisons 20
Comparisons: Corporate Tax Rates 100% 80% 60% 40% 20% 28% 22% 32% 35% 25% 30% 0% South Africa Botswana Namibia Zambia Zimbabwe Angola 21
Comparisons: VAT Rates 20% 10% 14% 12% 15% 16% 15% 10% 0% South Africa Botswana Namibia Zambia Zimbabwe Angola 22
World Bank Report 2017 Ease of paying taxes 3 rd RSA 51 st 4 th Botswana 55 th 5 th Zambia 58 th 9 th Namibia 5 19 5 74 th 29 th Angola 157 th 31 st Zimbabwe 164 th 23
World Bank Report 2017 Zimbabwe 51 27 Number of Tax Payments required to be compliant Botswana 34 South Africa Angola 31 Namibia 27 Zambia 26 South Africa 7 24
World Bank Report 2017 Amount of hours required to be compliant Zimbabwe 242 South Africa 203 Zambia 186 Namibia 302 Botswana 152 302 25
Tax Reforms 26
Tax Amendments 01 Corporate Tax Rate 33% to 32% 02 WTS Rate 25% to 10% 2015 03 VAT Threshold N$500,000 04 Voluntary VAT Threshold N$200k 27
Tax Amendments 05 Restraint of Trade payment taxation 06 Recovery of tax debts (provisions) 2015 07 PAYE on directors fees 08 Lifting of corporate veil 28
Tax Amendments 01 Environmental Duties: 02 WTS: 10% to 25% 2016 Light bulbs Tyres CO 2 emissions Directors fees Foreign entertainers 29
Tax Proposals 2017/2018 Presumptive Tax Solidarity/Wealth Tax xxx Tax on Capital gains BEPS and 0% VAT 30
Promulgated but not yet effective 1 2 Export Levy Act Customs & Excise Amendment Act 2016 2 Team name Team name 31
SACU Excise Duty Increases Sin Taxes effective 22 February 2017 Rise in tobacco and alcohol excise duties: Increase New Duty 340 ml malt beer N$0.12 N$1.36 750 ml bottle of unfortified wine N$0.23 N$2.71 750 ml bottle of sparkling wine N$0.70 N$8.60 750 ml bottle of spirits (whiskey, brandy, vodka etc.) N$4.43 N$52.56 Pack of 20 cigarettes N$1.06 N$14.30 340 ml bottle ciders & alcoholic fruit beverages N$0.12 N$2.22 32
Other Reforms Transfer Pricing Revenue Agency Inland Revenue Reforms ITAS System Tax Incentives Review DTA Framework Revision Tax Amnesty 33
Stronger Together True equality means holding everyone accountable in the same way, regardless of race, gender, faith, ethnicity or political ideology Hon. Minister of Finance,Mr. Calle Schlettwein quoting Monica Crowley 34
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