Revenue Productivity of Tax System in Namibia (1967-1997)
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Date
1999-06
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A.A.U
Abstract
This study evaluates the revenue productivity of Namibian's overall tax system and
of individual taxes on the basis of estimates of tax buoyancy and elasticities. The main
aim of the paper is to raise government awareness to the need in strengthening the
existing tax system as a way to generate more revenue to cut down the seemingly
widening budget deficits. A study of this nature is needed to encourage the government to
act quickly given the major changes which are taking place such as the renegotion of the
Southern Africa Customs Union (SACU), which may result in reduction in revenue to the
government.
The analysis shows that the tax system in Namibia is highly elastic and also
buoyant, as the coefficients, which are more than unity, show. For individual taxes, the
high elasticity is found on international taxes such export duty on diamonds, followed by
the customs receipts. The direct taxes such as taxes on income and profits are found to
be inelastic. It is to be noted that the elasticity of the tax system to a great extent reflects
the role played by external factors, which are beyond the control of the government.
Namibia, therefore, has to strengthen domestic tax structure and reduce reliance on
sources of revenue beyond its control, simultaneously reducing its expenditure.
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Keywords
Tax System, Revenue Productivity