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Tax day with its ups and downs

The other day when I had to hand in a number of income tax returns for my clients, I was surprised to see that the authorities had thought  ahead and addressed a very frustrating problem before it occurred.
The Receiver of Revenue had put a number of desks in front of the building where submission forms without cheques attached, could be handed in. There were no long queues of people wasting time (and money) just to hand in tax returns. The South African equivalent of this great idea is to allow people to submit their returns electronically.

The only major challenge was to find parking closer to the offices of the Receiver. My suggestion for next year is to have “regional” desks in the various suburbs of Windhoek to alleviate the parking problems of the Windhoek CBD or to have the main submission “office” at a place like the Windhoek Showgrounds or the Independence Stadium where there is ample parking space.
In view of the fact that Namibians are still taxed extraordinarily high, I think the authorities may consider making it as easy as possible to finalise this matter.
I would also like to suggest one or two changes to the income tax system for next year that I believe is long overdue.
First, deductible contributions to make provision for our retirement should be increased to the same number as the tax threshold of N$50 000.
Second, the deduction of tax when pension fund members who earn too little to qualify as tax payers disinvest upon resignation or other reasons, should stop immediately. This is plain robbery.
The two things I saw reported in the media recently that scared me was the amount of overspending by government ministries and also of (at least) one ministry that spent almost none of its annual budget.
American president Ronald Reagan famously said, “When a business or an individual spends more than it makes, it goes bankrupt. When government does it, it sends you the bill. And when government does it for 40 years, the bill comes in two ways: higher taxes and inflation. Make no mistake about it, inflation is a tax and not by accident.”
I think politicians should be held accountable for mismanagement of public funds whether it is on the over-spending or under-spending side of the balance.
Then to wind up, and I shall argue this point in my next column, I think our economy and our income tax regime can both benefit by changing our income tax system from a progressive rate system to a flat rate tax system.
There are many examples of where it worked to the benefit of countries who changed to a flat tax system.
For some reason we try to apply very advanced (and confusing) systems that work well in the developed world without considering who we really are and how simpler systems can achieve much better results. But more on this next time.

 

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