Anything that affects entrepreneurs in Africa affects us at TEF.
On today’s episode of #TEFAdvocacy, we will be discussing policies affecting entrepreneurs in Namibia.
A researcher ranked taxes and levies as No 2 on the Top 5 Challenges Affecting Entrepreneurs in Windhoek, Namibia. According to Lazarus Amukeshe of The Namibian, economists and analysts have called for a leaner tax for small enterprises over the past few years, and the ministry only gave in to the demand towards the end of last year, saying they will need at least a year to study how best to tax small and medium enterprises. The Namibian tax code does not discriminate between taxpayers according to size and Schlettwein, a past minister of finance said this will not change. This statement was made in January 2020, we are in 2022 and the tax rate is still 32%. Entrepreneurs have complained of this tax rate being too high for their businesses. This tax rate will prevent some entrepreneurs from registering their businesses which leads to tax evasion and reduced income for the government.
Of 190 countries ranked in the World Bank’s Doing Business 2020 report, Namibia ranked number 104. Namibia ranked lowest in the following three areas: Registering Property (173); Starting a Business (165); and Trading Across Borders (138). There are 10 procedures spanning over 54 days, involved in registering a business in Namibia. This is a time that entrepreneurs cannot afford to lose because most startups have little to no employees and the burden of running the business is on very few people. When time that should be spent on running the business is diverted to registering the business, the business will most likely suffer some setbacks or even losses.
We propose that the government look into better ways of reducing the burdens of taxes and levies in favor of SMEs. SMEs play a vital role in shaping a company’s economy; therefore, they should be given preferential treatment in some aspects in order to promote their growth and development.
We propose that the government reduce the steps involved in registering a business, make some of these steps online and easier.
The Micro, Small and Medium Enterprise Policy that was approved by the cabinet and parliament of Namibia in 2016 was a step in the right direction. It addressed many of the challenges faced by entrepreneurs and also made great recommendations towards solving these challenges but unfortunately there is not a significant difference in the MSME space. There has been a lack of implementation of the recommendations made.
It is our hope and wish at TEF that the government of Namibia implements the MSME policy. It will definitely go a long way in improving entrepreneurship in Namibia which will in turn improve economic growth.
~ Author: Opeyemi Ayodeji