FirstRand Namibia economist Ruusa Nandago said the Southern African Customs Union (SACU) receipts will account for 32 per cent of the total revenue for the 2023/2024 financial year (FY), making it the largest source of revenue for the Namibian government.

In a statement released by FirstRand Namibia on Tuesday, Nandago said the SACU revenues are expected to increase by 71,6 per cent from N.dollars 14.2 billion in FY 2022/2023 to N.dollars 24.3 billion in FY 2023/2024.

“This is a welcome relief to the fiscus as it provides an upside to government revenue which is expected to increase by 16,5 per cent from N.dollars 64.1 billion in FY 2022/2023 to N.dollars 74.7 billion in FY 2023/2024,” said Nandago.

She added that a breakdown of revenue sources shows that SACU receipts will now account for 32,6 per cent of the total revenue for FY 2023/2024, making them the single largest source of revenue for the Namibian government.

In the last decade there have been three SACU revenue shocks, in 2010/2011, 2016/2017 and 2020/2021.

Nandago therefore said that it is important that the government continues to broaden the domestic tax base and diversify its source of revenue.

“The finance minister (Iipumbu Shiimi) highlighted in his speech of the National Budget tabling that the government plans to boost domestic tax revenue collection through tax administration reforms aimed at improving tax compliance and collections on tax arrears,” she said.

SACU is the oldest customs union in the world that was established between Botswana, Eswatini, Lesotho, Namibia and South Africa.

The union allows for these five countries to share trade related customs and excise revenue and for the free movement of goods and services within the union. All customs and excise duties are collected in a common revenue pool and shared among the countries according to a revenue sharing formula.

Nandago concluded saying that South Africa is the largest contributor to the pool, making up 97 per cent of the total contribution, followed by Namibia at 1.4 per cent.

Source: The Namibian Press Agency