Namibian Minister of Finance Ipumbu Shiimi on Wednesday tabled a 72.8 billion Namibian dollars (about 4.2 billion U.S. dollars) budget for the financial year 2020 to 2021 with special emphasis on combating COVID-19 and reducing poverty.
He said the projected impact of COVID-19 on the Namibian economy and the large downward adjustments in nominal GDP have a significant negative effect on revenue and fiscal indicators for the year 2020/2021 and over the medium term.
“Revenue for 2020/21 is projected at 51.4 billion Namibian dollars, some 30.0 percent of GDP. This is 8.3 billion Namibian dollars or 14.3 percent below the indicative medium term expenditure framework estimates for 2020/21 and reflects the COVID-19 induced impact on the various revenue streams,” Shiimi said.
“At 22.3 billion Namibian dollars, SACU (Southern African Customs Union) receipts will anchor the projected revenue for 2020/21. For the following fiscal year, this revenue source is expected to come under pressure in the face of subdued economic and trade conditions globally and in the customs area,” he added.
The Namibian minister said external and domestic demand shocks and trade disruptions will result in about 32.8 percent decline in VAT collections.
“Supply side and production disruptions would lead to a decline of about 20.3 percent in individual income tax on account of wage reductions and job layoffs across various sectors of the economy,” he said. Enditem