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2020/21 Mid-Year Budget ReviewHighlights
October 2020
PwC October 20202020/21 Mid-Year Budget Review
2020/21 Mid-Year Budget Review
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PwC October 20202020/21 Mid-Year Budget Review
OverviewThe Minister of Finance presented the Mid-Year Budget Review Policy Statement in Parliament on the 20th of October 2020. This overview summarises highlights from the speech.
2020/21 Mid-Year Budget Review
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“Together defeating COVID-19, Together thriving again”– Hon. Ipumbu Shiimi, Minister of Finance
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Budget Comparisons (N$ Millions)Total Revenue Comparison
Chantell HusselmannCountry Senior Partner / Tax Leader
Actual revenue outturn for 2019/20 amounted to N$58.5 billion, generally on par with the budget revenue estimate of N$58.3 billion and amounting to 32.7 percent of GDP. Revenue for the FY2020/21 is expected to increase with N$3.8 billion largely attributable to Income Taxes on Individuals of N$2.7 billion and Company Taxes of N$1 billion.
55,882
58,525
51,397
55,179
46,000
48,000
50,000
52,000
54,000
56,000
58,000
60,000
Actual Actual Proposed (Annual)
Revised (Interim)
2018/19 2019/20 2020/21 2020/21
Revenue Comparison (N$ Million)
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Budget ComparisonsRevenue Analysis
2020/21 Total Revenue is estimated to be N$55.2 Billion of which N$3.3 Billion is Non-Tax Revenue
Income Taxes on
Individuals24%
Company Tax11%
Property & Other Taxes
2%
Indirect taxes20%
Customs & Excise43%
TAX REVENUE (Composition): 2020/21 Revised
17,375 18,922 22,252 22,252
-
5,000
10,000
15,000
20,000
25,000
2018/19(Actual)
2019/20(Actual)
2020/21(Annual Proposed)
2020/21(Interim Revised)
SACU RECEIPTS (N$ millions)
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Budget Comparisons (N$ Millions)Total Expenditure Comparison
Johan NelCorporate Tax [email protected]
The half-year expenditure execution was 49% of the budget, amounting to N$35.8 billion. The FY2020/21 expenditure budget remains unchanged at N$72.8 billion due to proposed reallocation of resources. The proposed reallocations are intended to meet resource shortfalls for the provision of infrastructure and essential services.
65,108
67,343
72,772 72,772
60,000
62,000
64,000
66,000
68,000
70,000
72,000
74,000
Actual Actual Proposed (Annual) Revised (Interim)
2018/19 2019/20 2020/21 2020/21
Expenditure Comparison (N$ Million)
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Budget Comparisons (N$ Millions)Major expenditure reallocations
N$148 mil N$75 milN$158 mil N$40 milN$326 mil N$50 mil
To Health and Social Services
To Public Enterprises
(NWR & TransNamib)
To Gender Equality, Poverty
Eradication and Social
Welfare
ToAgriculture,
Water & Land Reform
To Basic Education, Arts and Culture
To Electoral Commission of Namibia
Reallocation of funds amounts to N$842 million, comprising of N$240
million for the development budget and N$602 million for the operational budget.
N$22 mil
To Ministry of Defence &
Veterans Affairs
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Budget Comparisons (N$ Millions)Total Deficit Comparison
The 2020/21 Mid Year budget review reflects a budget deficit that has decreased from 12% to 10.1% of GDP from the initial budget tabled earlier this year. This is estimated to reach 6.4% of GDP by FY2022/23.
Riana EsterhuyseAssociate Director
Corporate Tax and [email protected]
9,226 8,818
21,375
17,593
-
5,000
10,000
15,000
20,000
25,000
Actual Actual Proposed(Annual)
Revised (Interim)
2018/19 2019/20 2020/21 2020/21
Deficit Comparison (N$ Million)
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Budget Comparisons (N$ Millions)Total Debt Comparison & Expenses Composition Expenditure
as a % of GDP
estimated at
41.8%
Debt as a % of GDP
estimated at
68.8%
7%
16%
5%
21%
51%
EXPENDITURE BY MAIN (REVISED AVAILABLE BUDGET)
AdministrativeEconomicInfrastructurePublic SafetySocial
87,533
100,400
119,139 119,756
Actual Actual Proposed (Annual) Revised (Interim)
2018/19 2019/20 2020/21 2020/21
Total Debt (N$ Million)
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Electronic Filing Tax Relief Programme
Introduction of a one-year, Electronic Filing Tax Relief Programme. A penalty and interest relief is to be provided to taxpayers with outstanding tax arrears filing returns electronically, starting February 2021.
• 100% of penalties and 95% interest to be waived provided capital tax debt settled within 3 months;
• 100% penalties and 75% interest to be waived provided capital tax debt settled within 12 months; • 100% of penalties and 95% interest to be suspended for the hardest hit industries such as
tourism, hospitality, aviation, travel and construction sectors.
Proposed re-engineering of the VAT refunds audit process, reducing turnaround payment for undisputed VAT to no more than 90 days after receiving the VAT claim and upon fulfilling set requirements by February 2021.
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MTEF Policy Priorities
o Proposal to review the public wage sector bill by introducing options for voluntary retirement for the age cohort 55-60 years;
o Assessing a restructuring of PSEMAS;
o Finalising reforms to enable state divestiture and listing of state assets; and
o Finalising the special economic zone policy to retool and modernise the incentive regime.
Ansie RossouwPartner in Charge Walvis Bay
Amongst others, the following MTEF Policy priorities were noted during the Honourable Minister of Finance’s Mid-Year Budget Speech.
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Questions? Contact one of our tax experts below:
The information contained in this document is based on current Namibian legislation and practice as well as the 2020/21 Mid Year Budget speech of the Minister of Finance. Amendments after publication of this brochure as well as the DIR's departmental practice may lead to further changes. This brochure is intended for general information only and does not deal exhaustively with any topics. No responsibility can be accepted for any errors or loss, however caused or sustained. The firm's partners should be contacted for tax planning issues.
© PwC Namibia [Practice No. 9406](“PwC”). All rights reserved. PwC refers to the Namibian member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/na for further details.
Ansie RossouwPartner-In-ChargeWalvis Bay Office
Chantell HusselmannCountry Senior Partner
Tax Leader / Indirect Tax [email protected]
Johan NelPartner
Corporate and International [email protected]
Riana EsterhuyseAssociate Director
Corporate Tax and [email protected]
As concluded by the Honourable Minister of Finance“The darker the night, the brighter the stars…” – Russian Poet
