The much-debated environmental levy, which had been introduced by the Ministry of Finance (MoF) two years ago, is expected to be functional by the end of this year.
Although the levy was expected to take effect in the first course of last year, MoF permanent secretary Ericah Shafudah notes it has delayed due to inconclusive consultations, which has just been finalised with the relevant stakeholders and industries.
However, MoF is currently drafting the legal bill of the environmental levy to be tabled in the Parliament at completion.
The soon-to-be introduced levy will be the tax on incandescent bulbs, tyres and the so-called carbon emission tax. The other possible types of levies might include waste management levies on bottles, plastic bags, non-recyclable cans and any other environmental pollutants.
The environmental levies, which will be collected by Customs and Excise at the point of import or of manufacture, will be used to strengthen Government’s capacity to fund environmental programmes and other national development programmes.
Although the initial proposition of the levy had instilled debates on the basis that it would be high, Shafudah stresses the taxes are aimed at encouraging industries to change their behaviour to use environmentally friendly alternatives.
Various countries have already implemented the carbon or energy taxes that are related to carbon content.
In the Organisation for Economic Co-operation and Development (OECD) countries, most environmentally related taxes with implications for greenhouse gas emissions are levied on energy products and motor vehicles rather than direct CO2 emissions.
OECD countries include Iceland, Ireland, Norway, Netherland, United Kingdom, United States, Switzerland, Italy, Portugal, Spain, Turkey, Germany, Greece and Luxembourg.
If the environmental taxes become fully functional, Namibia would become the second African country to implement the levy after South Africa (SA) that has introduced various measures to address environmental issues. SA is one of the highest energy intensities in the world. It introduced a levy on plastic bags in 2004 and a carbon tax levy on motor vehicles in 2010.
According to the environmental fiscal reform, carbon tax and climate tax in SA, which was presented in the Philippines in July 2013 notes the motor vehicle CO2 emission tax has encouraged consumers to buy vehicles with lower carbon emissions. Related data show a declining average of CO2 emissions for passengers since that tax was introduced.
The upcoming Environmental Compliance Namibia Conference under the theme “Compliance, Enforcement and Prosecution” to be held in Windhoek next month will discuss the pending environmental levy and the way forward concerning various aspects pertaining to it. Also at the conference, discussions will centre around ways to minimise all expected costs in implementing the environmental levy.