Schlettwein calls for smarter government spending, stronger tax collection

By: Envaalde Matheus

Former finance minister, Calle Schlettwein, says weak tax collection is one of the reasons the government continues borrowing, despite Namibia’s vast natural resources.

His remarks come after the government paid off its Eurobond but continued borrowing, resulting in the country’s public debt now standing at about N$178 billion, made up of about N$158 billion in domestic debt and N$19 billion in external debt.

Schlettwein warned that unless the government improves revenue collection and aligns spending with national priorities, rising debt will continue to limit development.

He said only a small percentage of the population pays income tax, adding many businesses remain outside the tax system.

Schlettwein told NewsOnOne that profit-shifting by multinational mining companies could also be limiting the tax revenue Namibia collects from its natural resources.

While acknowledging a balanced mix of domestic and foreign borrowing, Schlettwein cautioned against excessive reliance on borrowing from pension funds such as GIPF.

He warned that exposing pension funds to government debt could put retirement savings and the wider economy at risk.

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