Government clears N.dollars 1.4 billion legacy tax debts of public enterprises

SWAKOPMUND: The government has through its operational budget settled N.dollars 1.4 billion in once-off legacy tax liabilities for selected public enterprises whose funding was severely reduced due to fiscal consolidation in previous years.

The enterprises include the University of Namibia (UNAM), TransNamib, the Namibia Broadcasting Corporation (NBC), the New Era Corporation, the National Fishing Corporation of Namibia (FishCor) and the Roads Contractors Company (RCC).

During the tabling of the 2024/25 budget on Wednesday, Finance and Public Enterprises Minister Iipumbu Shiimi said that this is an exceptional once-off exercise to clear the legacy debt of public enterprises accumulated prior to the establishment of the Namibia Revenue Agency (NamRA).

‘Accordingly, this transaction is recorded as both revenue and expenditure in our books, resulting in a neutral position from a fiscal perspective. Furthermore, this action was undertaken on the back of agreed conditions including regular publication of audite
d financial statements and commitment to meet future tax liabilities henceforth,’ he explained.

He further added that the action was undertaken to enable NamRA to apply the law to all taxpayers equally, noting that should any public enterprise accumulate tax liabilities going forward, treasury is not prepared to offer any support.

Additionally, to close the infrastructure gaps that continue to weigh against the country’s growth potential, the development budget has been increased significantly by 58.1 per cent to N.dollars 12.7 billion.

This, according to Shiimi, is inclusive of N.dollars 3.2 billion in grant-funded and loan-funded projects to improve infrastructure through various ministries.

The development budget is equivalent to 4.6 per cent of Gross Domestic Product, a significant improvement from prior years.

Shiimi however expressed concern about limited project execution capacity at most Offices/Ministries/Agencies (OMAs) and procurement bottlenecks which continually translate into administration
of funds from and/or underspending on the development budget.

He noted that the government will continue to work on addressing these shortcomings.

Source: The Namibia Press Agency