GRN to introduce solidarity tax
October 27th, 2015 by New Era Staff Reporter
Government plans to introduce a solidarity tax in the 2016/17 budget that would compel every income-generating citizen above a certain threshold to make a contribution towards a fund earmarked for poverty eradication.
President Hage Geingob – who revealed the plan yesterday – says another form of wealth redistribution under consideration would be to entice owners of companies to dilute shareholding to include workers, thereby redistributing more of company income downward, instead of upward, as is the case when shareholding is concentrated in the hands of a few.
Currently Namibians, who earn less than N$50 000 per year are exempted from paying income tax, while those in higher income brackets pay progressively more, depending on the level of income.
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N$50 MILLION FOR FOODBANKS
Geingob said one immediate measure to deploy in the fight against poverty would be the establishment of food banks across Namibia. He said about N$50 million will be made available this year to get the project off the ground.
The president explained that such food banks would be organised along streets or clusters of streets, where young unemployed people would be engaged to play a critical role in the distribution of food to needy families.
He has also requested that between 30 000 and 50 000 hectares in the Mangetti area be availed for agricultural and youth enterprise activities.
"We want food banks in all the Katuturas in Namibia...
"In the Namibian House, no child should go hungry," he said.
In turn, he says young people will get a minimal income for the work done, and by so doing the notion of free money would be dispelled. He expects a high level of contribution from the private sector and the inculcation of a culture of voluntarism by all Namibians to support the food banks.
WARS NOT WON IN ONE DAY
Geingob officially opened a two-day National Conference on Wealth Redistribution and Poverty Eradication in Windhoek yesterday, which aims to adopt a national policy on wealth redistribution and poverty eradication.
"Poverty cannot be eradicated overnight. Wars are never over in one day. Our immediate aim, therefore, will be to significantly reduce poverty over the medium term. Within the next few months we will quantify exactly by how many percentage points we aim to reduce poverty," he said.
He is, however, hopeful that Namibia can beat the global goal of eradicating poverty by 2030. The Head of State says if all Namibians pull together in one direction, "We should be able to beat the global deadline by five years, therefore, achieving our goal by 2025."
CASH HANDOUTS NOT ENOUGH
Even though the Ministry of Poverty Eradication has held consultative meetings in all 14 regions to debate possible interventions, such as the Basic Income Grant (BIG) to eradicate poverty and redistribute wealth more equally, the president does not entirely agree with the BIG approach.
Geingob quoted Nobel Prize-winning economist Amartya Sen, who famously said "Poverty is not just about income."
The president noted that if it were the case, the war on poverty would have been easy, because all government would have to do is provide some form of monetary income to each citizen.
"In the simplest sense this is what proponents of the BIG are arguing for. Give N$100 to each Namibian and poverty in Namibia will be eradicated.
"If only it was that simple. It becomes clear that poverty eradication is a complex matter. It, therefore, needs a holistic approach to overcome it," he said.
Geingob also challenged commercial farmers to donate on a yearly basis at least two head of cattle to the food bank, saying such livestock would be used to establish centralised abattoirs from where fresh meat will then be made available, either free of charge or at a minimal fee to the most vulnerable.
The fisheries ministry is also expected to play a role through the allocation of fish quotas to the food bank.
The president further revealed that central government is close to finalising the legal framework to reduce the income gap, saying what is also required is a shift in the mindset of people, so that employers start to empathise with and remunerate their employees appropriately.