Namibia will soon be one of the few African countries to institute environmental levies following the proposition by the Ministry of Finance in a bid to preserve the ecosystem.
The only other country to do so is South Africa, which introduced its carbon emission taxes on cars, where the car models determine the additional tax fee that car buyers have to pay.
Both the ministers of Environment and Tourism, Neitumbo Nandi-Ndeitwah and the Minister of Finance, Saara Kuugongelwa-Amadhila have confirmed the institution of the levy in a bid to buffer the country’s revenue which is heavily dependent on the Southern African Customs Union (Sacu).
“The environmental tax will be instituted by the Ministry of Finance in the quest to preserve the environment of the country in these times where climate change is a prevailing danger to all,” Nandi-Ndaitwah said.
The minister added that the environmental levies would include carbon taxes.
Nandi-Ndaitwah noted that they are planning on educating the public, entrepreneurs and businesses on the necessity of the environment levy for the ecological well-being of the country.
Namibia’s move comes at a time when most developing countries are finding ways to curb the effects of global warming, which is caused by the emission of green house gases into the atmosphere.
The other possible types of levies might include waste management levies on bottles, plastic bags, non-recyclable cans and any other environmental pollutants.
Commenting on the issue, Nikia Bauernschmitt, senior tax manager at Deloitte said, “I understand the necessity of the carbon tax as it intends to promote ecologically sustainable activities through economic incentives but they will have to consider its impact on every Namibian as it might be harsher on the lower income earners than the high income earners.”
The lower income earners might have to pay a higher percentage of total income for consumer goods and services affected by the implementation of the carbon tax.
Bauernschmitt added that the Government might also consider alleviating some taxes for low income earners in order to balance their burden.
“In my experience, VAT and PAYE taxes usually get reduced in some countries once the carbon tax is implemented in order to lessen the burden for low income earners,” he said.
However Nandi-Ndaitwah assured the public that this is not going to be necessarily the case.
“Our concern with the implementation of the environmental levy is to improve the quality of the environment by reducing activities that degrade Namibia’s environment,” Nandi-Ndaitwah pointed out.
On the other side, tax expert, Bauernschmitt explained that the carbon tax could also be used to give back to the public through funding programs that will provide long term benefits to consumers and businesses, or further research and developmental programs as well as help out in the transportation infrastructure.
In the continual pursuit to minimise the impact to the environment, the Environmental Act proposed in 2007 finally took effect this past month on the 6th of February.
The Environmental Act includes 58 provisions and seeks to prevent or minimise “Consequential qualitative or quantitative impact on the environment that may result from a wide range of activities”.