Expanding Horizons Budget Review 2016/2017 February 2016 Nampower

www.pwc.com.na
Expanding Horizons
Budget Review 2016/2017
February 2016
Nampower
Convention Centre
Budget speech 2016
Focus areas
Numbers in the Budget
Tax: How do we compare
Tax reforms
Expanding Horizons
PwC
February 2016
2
Focus Areas 2016/2017
Budget Review
Expanding Horizons
PwC
Key Focus Areas for 2016/2017
Economic Growth
“Towards pro-growth
fiscal consolidation”
Poverty Eradication
Harambee
Prosperity Plan
Improved Public Service
Delivery
Expanding Horizons
PwC
February 2016
4
Public Finance Reforms
• Mid year Budget Review
• Public Procurement Bill
• PPP Legislation
• Public Finance Management Bill
• Asset Management Policy
• Public Expenditure Reviews
Expanding Horizons
PwC
February 2016
5
Namibian Economic Statistics
28,1%
70%
5,3%
N$15,38
Unemployment at
30 September 2015
Namibian Food
Imports
Inflation at Jan
2016
US to Nam Dollar
Exchange rate
Expanding Horizons
PwC
February 2016
6
Numbers in the 2016/17 Budget
Expanding Horizons
PwC
The Numbers - Revenue vs Expenditure
2014/15
2015/16
2016/17
N$million
N$million
N$million
Actual
Estimates
65.2
Budget
66.0
70
58.7
60
50
57.8
56.8
49.9
Revenue
N$ millions
40
Spending
30
Surplus / (Deficit)
20
10
-10
Expanding Horizons
PwC
-20
(8.77)
(8.414)
(8.160)
Top 5 Ministries allocations 2016/17
1
Education,
Arts & Culture
N$ 12.8 bn
(2015: N$ 11.3
bn)
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PwC
2
3
Health &
Defence
Social
Services
N$ 6.6 bn
N$ 7.2 bn
(2015: N$7.2 bn)
(2015:N$ 6.5 bn)
4
Police
N$ 5.1 bn
(2015:N$ 4.7 bn)
5
Transport
N$ 4.2 bn
(2015:N$ 4.5 bn)
February 2016
9
Government Spending Cuts
•
Cuts on non-core activities - Anticipated N$5 billion in savings
•
Capping of public sector wage bill increases
•
Cap on civil service size
Non-core
activities
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PwC
Overtime
Vehicles
S&T allowance
Office buildings
Office equipment
and furniture
Materials and
supplies
February 2016
10
Total expenditure execution rates
2013/14
Spending rate 98.2%
2014/15
Spending rate 97.5%
2015/16 Spending rate 79.1% (only up to mid Feb)
Expanding Horizons
PwC
February 2016
11
Spending priorities
Education (basic and higher)
Public safety and order
Infrastructure development
Improved public administration
PPP’s for infrastructure projects
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PwC
Spending priorities
Health remains a priority spending area
Increase in old age pension to N$1,100
Contingent provision (e.g. drought relief)
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PwC
Infrastructure
development
Water
infrastructure
Roads
projects
Port
development
Additional
N$ 17 billion
SME
development
Mass Housing /
Land Project
Railway
Projects
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PwC
February 2016
14
Tax Revenue VS Non-Tax Revenue
Tax Revenue
N$ 54.1 bn
Total Revenue
N$ 57.8 bn
Non- Tax
Revenue
N$ 3.6 bn
Expanding Horizons
PwC
February 2016
15
Total Tax Revenue (N$ 57.8 billion)
Customs &
Exise
26%
Withholding
Taxes
1%
Property Taxes
1%
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PwC
Income taxes
45%
VAT
27%
February 2016
16
SACU Receipts
20,000
2014
2015
2016
2017
2018
2019
18,117
18,000
16,000
16,905
14,726
16,659
14,121
14,829
N$ millions
14,000
12,000
10,000
8,000
6,000
4,000
2,000
Expanding Horizons
PwC
-
February 2016
17
Tax - How do we compare?
Expanding Horizons
PwC
Comparisons: tax rates
Corporate Tax Rate
100%
80%
60%
40%
28%
20%
22%
32%
35%
Namibia
Zambia
25%
0%
South Africa
Expanding Horizons
PwC
Botswana
Zimbabwe
February 2016
19
Comparisons: tax rates
VAT Rate
Botswana
12%
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PwC
RSA
14%
Namibia
15%
Zimbabwe
15%
Zambia
16%
February 2016
20
World Bank Report 2016
Paying taxes ranking out of 53 countries in Africa
South Africa #2
Zambia #4
Botswana #7
Namibia #12
Zimbabwe # 27
Expanding Horizons
PwC
February 2016
21
World Bank Report 2016
Comparisons in Southern Africa
Ease of paying taxes
1st
2nd
3rd
4th
5th
6th
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PwC
RSA
20th
Zambia
46th
71st
Botswana
Namibia
Angola
Zimbabwe
1
93rd
141st
145th
February 2016
22
World Bank Report 2016
Tax Payments Comparisons in Southern Africa
The number of tax
payments required to
be compliant.
Angola
30
2
Zimbabwe
49
Namibia
27
Expanding Horizons
PwC
4
Zambia
26
3
Botswana
34
6
South Africa
7
5
February 2016
23
1
World Bank Report 2016
Comparisons in Southern Africa
1
2
3
4
5
• Botswana – 152 hours
Namibia
320 hours
• Zambia – 157 hours
• South Africa – 200 hours
Zimbabwe
242 hours
The time it takes in
hours per year for
tax administration
and compliance.
• Zimbabwe - 242 hours
• Namibia – 320 hours
Expanding Horizons
PwC
Zambia
157 hours
February 2016
24
Tax reforms
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PwC
2015 Tax Amendments
Corporate tax rate reduction – 33% to 32%
Taxation of restraint of trade payments
WTS reduction – 25% to 10%
VAT threshold – N$500,000
Expanding Horizons
PwC
February 2016
26
2015 Tax Amendments
Criteria for voluntary VAT registration &
Import VAT accounts
Strengthening provisions for recovery
of tax debts
Electronic communication rules –
Mandatory security on import accounts
Online filing & tax payment
Expanding Horizons
PwC
February 2016
27
Tax Amendments – Sin Taxes
Rise in tobacco and alcohol excise duties:
Increase
New Duty
340 ml malt beer
7c
N$1,24
750 ml bottle of unfortified wine
15c
N$2,48
750 ml bottle of sparkling wine
48c
N$7,90
N$3,77
N$48.13
82c
N$13,24
15,5c
750 ml bottle of whisky
Pack of 20 cigarettes
Expanding Horizons
PwC
Tax Amendments – Previously proposed &
not yet legislated
Transfer duty – sale of shares
(property rich & mineral licences)
Environmental Taxes
Export Levy
Tabling
of Customs
& Excise
Bill–
Electronic
communication
rules
Online filing & tax payment
Expanding Horizons
PwC
February 2016
29
Other reforms - Inland Revenue Reforms
ITAS
System
Transfer
Pricing
Revenue
Agency
Expanding Horizons
PwC
Business Process
Re-engineering
Revision of
DTA framework
Tax
Incentives
Review
February 2016
30
Taxes under discussion
Presumptive Tax
Solidarity Tax
Increased Fuel Levy
Excise Duty on Ciders & Alcoholic Fruit
Beverages
Expanding Horizons
PwC
February 2016
31
Expanding Horizons
“In 2016, it is a time to turn words into reality, it
is a time to implement and, therefore, this is the
year of implementation ”
President of Namibia, Hage Geingob
Expanding Horizons
PwC
February 2016
32
Thank You
The Budget Speech and
presentations are available on:
www.pwc.com.na
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