Revenue Productivity Of Tax System In Namibia (1967-1997)

This study evaluates the revenue productivity of Namibian's overall tax system andrnof individual taxes on the basis of estimates of tax buoyancy and elasticities. The mainrnaim of the paper is to raise government awareness to the need in strengthening thernexisting tax system as a way to generate more revenue to cut down the seeminglyrnwidening budget deficits. A study of this nature is needed to encourage the government tornact quickly given the major changes which are taking place such as the renegotion of thernSouthern Africa Customs Union (SACU), which may result in reduction in revenue to therngovernment.rnThe analysis shows that the tax system in Namibia is highly elastic and alsornbuoyant, as the coefficients, which are more than unity, show. For individual taxes, thernhigh elasticity is found on international taxes such export duty on diamonds, followed byrnthe customs receipts. The direct taxes such as taxes on income and profits are found tornbe inelastic. It is to be noted that the elasticity of the tax system to a great extent reflectsrnthe role played by external factors, which are beyond the control of the government.rnNamibia, therefore, has to strengthen domestic tax structure and reduce reliance onrnsources of revenue beyond its control, simultaneously reducing its expenditure.

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