The CEO of the Namibia Chamber of Commerce and Industry (NCCI), Charity Mwiya, has chastised the implementation of laws and regulations that are making it difficult for start-up businesses to flourish.
“Let us not make anti-business laws, that is why our economy cannot pick up because we are killing the grassroots that are supposed to make a significant contribution as they grow. Why should you want to charge a person who is already suffering and trying to emancipate themselves including families from poverty and unemployment? Those are not economic activities where one is expected to amass profits, but it is a community project, which seeks to help, and sustain oneself,” she said.
Mwiya, who was speaking during a Parliamentary Standing Committee on Economics and Public Administration’s meeting, said Namibia is one of the countries with the highest tax rate in the sub-region.
The standing committee sought to assess the challenges and make meaningful recommendations to the central government on some of the factors leading to the low economic growth in the Central Business District (CBD) through engagement with City of Windhoek (CoW) and various industry players.
Last week Namibia Revenue Agency (NamRA) announced that they would be enforcing the custom duties on imported bales of second-hand clothes mainly from Angola, saying the channels used of evading custom services, and instead using other undesignated points of entries were unacceptable.
On the other hand, NamRA is concerned that the channels used to smuggle or have the goods imported into the country are also costly to the buyer due to the long chain that comes with costs.
As such, NamRA suggested that they want to standardise the custom duties so that it becomes affordable to the buyers.
This comes after media reports had suggested that NamRA wants to impose a tax on second-hand clothing bales of up to 20%.
In May, the revenue agency was under fire after it burned goods worth N$5 million, of which some belonged to the ordinary citizens, alleging that they were counterfeit.
Reflecting on the matters of Windhoek and Khomas Region particularly, Mwiya said the businesses in the region alone owe the tax man N$5.7 billion in capital tax, excluding interest and penalties.
Speaking on the strides and efforts made by NCCI, Mwiya said through its intervention to assist SMEs that were hard hit by Covid-19 and failing to honour their financial obligations due to non-performing businesses.
“The Development Bank of Namibia was able to defer N$47.1 million up to November 2020, while other Banks deferred N$178.2 million until December 2021 to the tourism sector, as well as a further deferment of N$85.3 million, as a final payment moratorium. To date, N$263.5 million has been advanced to qualifying clients including 19 SMEs,” she said.
CoW is owed N$1.2 billion by both businesses and households.
“Businesses were not only struggling to service their loans, but were also facing difficulties in settling their fixed and variable costs as cash flow dried up due to the impact of the pandemic,” she said, adding that the economy of Khomas was affected considerably, especially businesses, although on one hand, the City remains fortunate due to its population, the high demand of housing as well as the business relationship internationally, including the region’s ability to manufacture and add value.
Signifying the effects on business, Mwiya said, records show the country registered 3,647 less businesses in the 2020/21 financial year, further decreasing to 3,308 in 2022. “This represents a 45% decline in close corporation and 46% companies/pty registrations respectively. In 2020, 176 companies were deregistered with two of those liquidated by BIPA.” In Khomas, over 7,000 employees were retrenched.
