mid-year budget 2019/20 review highlightspwc 2019/20 mid -year budget review. october 2019. 2019/20...

2019/20 Mid-Year Budget ReviewHighlights

October 2019

PwC October 20192019/20 Mid-Year Budget Review

2019/20 Mid-Year Budget Review

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OverviewThe Minister of Finance presented the Mid-Year Budget Review Policy Statement in Parliament on the 22nd of October 2019. This overview summarises highlights from the speech.


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“The economic and fiscal environment has changed and remains dynamic. Our economy, as small it is, remains resilient in

challenging times.” – Hon. Calle Schlettwein, Minister of Finance



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Budget Comparisons (N$ Millions)Total Revenue Comparison

Chantell HusselmannPartner

Tax Leader / Indirect Tax [email protected]

Revenue collection is on track for the first half of the year, with a Mid-Year revenue out-turn amounting to N$29.4 billion. This is estimated to be 50% of the budgeted revenue and about 2% better than the average half-year collection rate. Revenue for the FY2019/20 is expected to remain unchanged at the budgeted N$58.4 billion, 28.8% of GDP.

58,659

56,341

58,397 58,406

55,000 55,500 56,000 56,500 57,000 57,500 58,000 58,500 59,000

Actual Prel iminary Proposed (Annual)

Revised (Interim)

2017/18 2018/19 2019/20 2019/20

REVENUE COMPARISON (N$ MILLION)



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Budget Comparisons (N$ Millions)Revenue Analysis

2019/20 Total Revenue is estimated to be N$58.4 Billion of which N$3.7 Billion is Non-Tax

Revenue

19,597

17,375

18,917 18,917

16,000

16,500

17,000

17,500

18,000

18,500

19,000

19,500

20,000

2017/18(Actual)

2018/19(Prelim)

2019/20(Annual

Proposed)

2019/20(Revised Interim)

SACU RECEIPTS (N$ millions)

Income Taxes on Individuals

25% Company Tax14%

Property & Other Taxes

2%

Indirect taxes24%Customs & Excise

35%

TAX REVENUE (COMPOSITION): 2019/20 REVISED



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Budget Comparisons (N$ Millions)Total Expenditure Comparison

Johan NelPartner

Corporate Tax and Legal [email protected]

The half-year expenditure execution was 46% of the budget, amounting to N$30.6 billion. The half-year expenditure execution (excluding interest) was 52%. Development budget implementation rate at September 2019 is 37%. Interest rate payments approximates 11% of revenue.

67,523

65,104

66,550 66,550

63,500 64,000 64,500 65,000 65,500 66,000 66,500 67,000 67,500 68,000

Actual Preliminary Proposed (Annual)

Revised (Interim)

2017/18 2018/19 2019/20 2019/20

Expenditure Comparison (N$ Million)



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Budget Comparisons (N$ Millions)Major expenditure reallocations

N$211 mil N$88 mil N$88 mil N$ 67 milN$184 mil N$97 mil

To Health and Social Services

To Poverty Eradication and Social

Welfare

To Gender Equality and

Child Welfare

To Office of the Prime Minister (Drought

Relief)

To Education, Arts and Culture

To Agriculture, Water and Forestry

Freed up funds amounts to N$1.18billion, comprising of N$999.59 million

from the development budget and N$176.32 million from the operational

budget.

N$ 36 mil

To Home Affairs and Immigration

(Visa Stickers Project)



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Budget Comparisons (N$ Millions)Total Deficit Comparison

Riana EsterhuyseAssociate Director

Corporate Tax and [email protected]

The 2019/20 Mid Year budget review reflects a budget deficit that has decreased from 4.7% to 4.1% of GDP over the first half of the year. Estimated to reach 2.5% of GDP by FY2022/23.

8,864 8,763

8,153 8,144

7,600

7,800

8,000

8,200

8,400

8,600

8,800

9,000

Actual Preliminary Proposed(Annual)

Revised (Interim)

2017/18 2018/19 2019/20 2019/20

Deficit Comparison (N$ Million)



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Budget Comparisons (N$ Millions)Total Debt Comparison & Expenses Composition Expenditure

as a % of GDP stands

at

33.6%

Debt as a % of GDP

stands at

49.0%

74,468

87,533 96,271 96,934

Actual Preliminary Proposed (Annual) Revised (Interim)

2017/18 2018/19 2019/20 2019/20

Total Debt (N$ Million)

8%

14%

7%

21%

50%

EXPENDITURE BY MAIN (REVISED AVAILABLE BUDGET)

Administrative Economic Infrastructure Public Safety Social



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Main Income Tax Legislation ProposalsEstablishing of the Special Economic Zone, eliminating current tax incentives for manufacturers and exporters of manufactured goods

Specific taxation of trusts

Investigating lower tax regime for small business

Taxing of certain commercial entities

Conclude research on improving tax revenues from extraction sectors



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Main Indirect Tax Legislation Proposals

02VAT Zero rating of certain goods

Indirect Tax Proposals

Eliminating certain base eroding exemptions

03Export levy expansion to

incentivize local value addition

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Questions? Contact one of our tax experts below:

The information contained in this booklet is based on current Namibian legislation and practice as well as the 2019/2020 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.

Chantell HusselmannPartner

Tax Leader / Indirect Tax [email protected]

Johan NelPartner

Corporate Tax and Legal [email protected]

Riana EsterhuyseAssociate Director

Corporate Tax and [email protected]

As concluded by the Honourable Minister of Finance“Nothing happens until the pain of remaining the same, outweighs the pain of change.” - Arthur Burt

mid-year budget 2019/20 review highlightspwc 2019/20 mid -year budget review. october 2019. 2019/20...

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