Addressing the Plight of Poor Households by Zero-Rating VAT on Basic Commodities in Namibia

Though it is classified as an upper middle-income country and has an estimated annual gross national income (GNI) per capita of US$4,210, Namibia still faces the twin problems of relatively high levels of poverty and high income inequality. Difficult economic times began in 2008 as real economic growth dropped to 4.3 per cent from a high of 12 per cent in 2004, while cost-of-living inflation rose to a high of 10.4 per cent from a low of 2.3 per cent in 2003. The rate of unemployment (broad definition) grew to 51.2 per cent. Thus many poor households faced a rising cost of living without reliable sources of income. Their already dire situation was exacerbated by inauspicious climatic and soil conditions, which severely limit the role of subsistence farming as a viable source of livelihood in the country. (?)Addressing the Plight of Poor Households by Zero-Rating VAT on Basic Commodities in Namibia

Addressing the Plight of Poor Households by Zero-Rating Value Added Tax on Basic Commodities In Namibia

Difficult economic times began for Namibia in 2008 as real economic growth suddenly dropped to 4.3 per cent from the 5.5 per cent recorded in 2007. There were also wide fluctuations in the general level of prices of goods and services, including food commodities. Cost-of-living inflation rose to a high of 10.4 per cent from a low of 2.3 per cent in 2003 and unemployment rates were high, well in excess of 50 per cent; thus many households faced an increasing cost of living without reliable sources of income. The unfavourable circumstances of these households were exacerbated by inauspicious climatic and soil conditions, which greatly limit the role of subsistence farming as a viable source of livelihood in many parts of the country. In order to mitigate the impact of rising food prices and address food security concerns, the government decided to increase from eight to fourteen the number of basic commodities (foodstuffs and services) that had zero-rated value added tax (VAT) in 2000, as a means of improving access to basic foodstuffs and services needed for daily survival, particularly for the poor. This paper offers an ex-ante analysis of how the zero-of rating VAT on these basic commodities affected the well-being of poor households. We use data from the 1993/94 and 2003/04 National Household Income and Expenditure Survey and a mini survey conducted in 2009 to determine the consumption patterns of these commodities. The VAT burden lifted is determined and disaggregated by income decile. The analysis reveals that, contrary to expectations, rich households are more likely to benefit from VAT zero-rating than poor households. The findings of the study make it plausible to conclude that the zero-rating of VAT on basic commodities in 2000 and 2008 did not adequately target the commodities that the poor consume in large quantities and that they acquire in formal markets; hence the measure is unlikely to bring additional benefits to the poor. The government might have to reconsider the choice of VAT zero-rated commodities and include those that are consumed mostly by the poor and acquired in formal markets, while simultaneously strengthening and expanding other schemes such as social transfers which would benefit the poor disproportionately. (...)Addressing the Plight of Poor Households by Zero-Rating Value Added Tax on Basic Commodities In Namibia

The Pain of Love: Spousal Immigration and Domestic Violence in Australia—A Regime in Chaos?

A fundamental step that the 1994 Australian Migration Regulations developed into the immigration framework was to grant certain concessions to non-Australian spouses and interdependent partners who suffer domestic violence at the hands of their Australian counterparts. Victims of domestic violence are eligible to apply for permanent residence notwithstanding the otherwise applicable two-year waiting period. To understand the domestic violence exception, this Article explores the jurisprudence that has emerged from courts and other immigration tribunals. The Article proposes that further legislative and policy changes should be made in order to seal identified gaps, and to provide clear guidance to interested parties, judges and tribunal members who hear such matters

Addressing the plight of poor households by zero-rating value added tax on basic commodities in Namibia

Difficult economic times began for Namibia in 2008 as real economic growth suddenly dropped to 4.3 per cent from the 5.5 per cent recorded in 2007. There were also wide fluctuations in the general level of prices of goods and services, including food commodities. Cost-of-living inflation rose to a high of 10.4 per cent from a low of 2.3 per cent in 2003 and unemployment rates were high, well in excess of 50 per cent; thus many households faced an increasing cost of living without reliable sources of income. The unfavourable circumstances of these households were exacerbated by inauspicious climatic and soil conditions, which greatly limit the role of subsistence farming as a viable source of livelihood in many parts of the country. In order to mitigate the impact of rising food prices and address food security concerns, the government decided to increase from eight to fourteen the number of basic commodities (foodstuffs and services) that had zero-rated value added tax (VAT) in 2000, as a means of improving access to basic foodstuffs and services needed for daily survival, particularly for the poor. This paper offers an ex-ante analysis of how the zero-of rating VAT on these basic commodities affected the well-being of poor households. We use data from the 1993/94 and 2003/04 National Household Income and Expenditure Survey and a mini survey conducted in 2009 to determine the consumption patterns of these commodities. The VAT burden lifted is determined and disaggregated by income decile. The analysis reveals that, contrary to expectations, rich households are more likely to benefit from VAT zero-rating than poor households. The findings of the study make it plausible to conclude that the zero-rating of VAT on basic commodities in 2000 and 2008 did not adequately target the commodities that the poor consume in large quantities and that they acquire in formal markets; hence the measure is unlikely to bring additional benefits to the poor. The government might have to reconsider the choice of VAT zero-rated commodities and include those that are consumed mostly by the poor and acquired in formal markets, while simultaneously strengthening and expanding other schemes such as social transfers which would benefit the poor disproportionately

MODERATING EFFECT OF INFLATION RATES ON THE RELATIONSHIP BETWEEN FOREIGN EXCHANGE RATES AND STOCK PRICES IN THE KENYAN CAPITAL MARKET

There has been a downward trend in the equities market with NSE 25, NASI, and NSE 20 declining by 9.9%, 3.5%, and 5.7% respectively from 2012 to 2015 and 2017. Ever since the Shilling was allowed to float freely, the unpredictability of Nairobi’s exchange market has been largely observed and in 2006 February, the index in NSE 20-Share rose to 4057, 2007 January it went further to 5774, but in February 2009 it hit a low of 2475. The drop went further in 2011 by 27%. This brought about losses to investors for example in 2009 when brokerage firms collapsed. This has led to a loss of confidence in investors in the Nairobi Securities; and for this reason, researchers have to come in and work together to find ways of stabilizing our stock market. This research seeks to add value to the literature by analyzing whether the regulation of the interaction of inflation rates with exchange rates on stock prices will stabilize the undesirable situation. Stock market plays an important role of intermediation in the economy and enhancing investors’ confidence in the market can have a positive impact on resource allocation hence economic growth. Reviewed literature has found the effects both in the short-run and the long-run. The disparity of their results might be attributed to different countries that are being analyzed on different capital mobilities, economic links, trade volumes, and methodologies among others. This study established the moderating effect of inflation rates on the relationship between foreign exchange rates and stock prices. The study is built on the theory of stock prices. The research adopted a correlational research design. Time series monthly secondary data was collected from January 1998 to December 2018. Multivariate analysis was employed. The 2-step hierarchical regression which resulted in an R2 change of 3% was fairly a good increase in the predictive capacity for stock price changes. The study therefore concluded that Inflation Rates moderate the relationship between stock prices and exchange rates and recommends that the Central Bank of Kenya as the regulator and Capital Markets Authority (CMA) should consider formulating favorable policies to manage Inflation rates as it is an investment driver in the economy. JEL: E31; D53; E44  Article visualizations

October, 2010 Working Paper number 72 Ojijo Odhiambo United Nations Development Programme, Namibia John E. Odada Department of Economics, University of Namibia. Addressing the plight of poor households by zero-rating value added tax on basic commodities in Namibia

Difficult economic times began for Namibia in 2008 as real economic growth suddenly dropped to 4.3 per cent from the 5.5 per cent recorded in 2007. There were also wide fluctuations in the general level of prices of goods and services, including food commodities. Cost-of-living inflation rose to a high of 10.4 per cent from a low of 2.3 per cent in 2003 and unemployment rates were high, well in excess of 50 per cent; thus many households faced an increasing cost of living without reliable sources of income. The unfavourable circumstances of these households were exacerbated by inauspicious climatic and soil conditions, which greatly limit the role of subsistence farming as a viable so urce of livelihood in many parts of the country. In order to mitigate the impact of rising food prices and address food security concerns, the government decided to increase from eight to fourteen the number of basic commodities (foodstuffs and services) that had zero-rated value added tax (VAT) in 2000, as a means of improving access to basic foodstuffs and servicesneeded for daily survival, particularly for the poor. This paper offers an ex-ante analysis of how the zero-of rating VAT on these basic commodities affected the well-being of poor households. We use data from the 1993/94 and 2003/04 National Household Income and Expenditure Survey and a mini survey conducted in 2009 to determine the consumption patterns of these commodities. The VAT burden lifted is determined and disaggregated by income decile. The analysis reveals that, contrary to expectations, rich households are more likely to benefit from VAT zero-rating than poor households. The findings of the study make it plausible to conclude that the zero-rating of VAT on basic commodities in 2000 and 2008 did not adequately target the commodities that the poor consume in large quantities and that they acquire in formal markets; hence the measure is unlikely to bring additional benefits to the poor. The government might have to reconsider the choice of VAT zero-rated commodities and include those that are consumed mostly by the poor and acquired in formal markets, while simultaneously strengthening and expanding other schemes such as social transfers which would benefit the poor disproportionately

Effects of zero rating value added tax on government revenue in Namibia A partial equilibrium analysis

Purpose – The Government of Namibia has traditionally used fiscal (especially tax) policy as an instrument for annual budget formulation. Marginal tax rates for profits and various income brackets have been changed back and forth in response to changes in economic conditions. However, to date, no attempt has been made to evaluate the effectiveness of these reforms in achieving the broad national economic goals, in general, and the potential effects on government revenue in the short, medium and long-run periods, in particular. The purpose of this paper is to fill this information gap by analysing the implicationof the 2008 zero-rating of value added tax (VAT) on basic commodities for aggregate demand and government revenue. Design/methodology/approach – The study uses an analytical framework based on economic theory which posits that in an open economy, which trades with the rest of the world, aggregate demand for goods and services is made up of consumption demand, investment demand, government demand and net exports and that real sector equilibrium is attained when aggregate supply of goods and services is equal to aggregate demand for goods and services. Findings – Using the Namibia Household Income and Expenditure Survey results, the annual loss in government revenue attributable to this policy is,ceteris paribus, estimated to be N$310.4 million. With a marginal propensity to consume out of disposable income of 0.89, total expenditure by households on goods and services is likely to increase by N$276.3 million per annum. In the medium-to-long-run, national income will have increased by N$303.9 million per annum. Taxes which are responsive to changes in the level of national income will have increased by N$85.7 million, compensating for just over one quarter of the estimated loss in government revenue of N$310.4 million. Research limitations/implications – The study has used a partial equilibrium model as opposed to computable general equilibrium model, which provides a consistent framework that meets most of the sectoral and institutional data requirements for the simple reason that a social accounting matrix which can be used readily to connect data from different sources, such as national accounts and household surveys and would thus have been ideal model for analysing the impacts of the VAT tax reform has not been developed for Namibia. Practical implications – The paper provides a number of practical policy options available for government including, but not limited to, increasing direct taxes, VAT rate on specific (luxury) goods and services and statutory VAT rate on all other commodities not zero-rated, other taxes such as taxes; and borrowing from external sources. Social implications – It is established that zero-rating VAT on all the basic commodities in 2008 reduces the VAT paid by all Namibian households by N$310.4 million per year, which represents the annual increase in the disposable income of all households. And with a marginal propensity to consume out of disposable income of 0.89, total expenditure by households on goods and services will increase by N$276.3 million per year

Massive Cervico-Lingual Cystic Hygroma

Cystic Hygroma (CH) is an aberrant proliferation of lymphatic vessels  creating fluid-filled sacs that result from blockage in the abnormal lymphatic system. These benign lesions are characteristic in their capability to grow to an enormously huge size has potential pressure effects on the neighboring structures. The massive expansion can also lead to gross disfigurement of the neck and face. In this paper, we present a rare case of cervico-lingual CH in a 17-year old Rwandese boy. Though the lesion had caused massive expansion of the tongue (12cm x 10cm) and led to gross deformity of the mandible, the boy had no signs of respiratory distress. His main concerns were inability to eat solid foods and compromised speech. The management challenges and literature review on cystic hygroma of the head and neck region are discussed.Key Words: Cystic Hygroma, Cervico-Lingua

Estimation Of Reference Crop Evapotranspiration Using Fuzzy State Models

Daily evapotranspiration (ET) rates are needed for irrigation scheduling. Owing to the difficulty of obtaining accurate field measurements, ET rates are commonly estimated from weather parameters. A few empirical or semi–empirical methods have been developed for assessing daily reference crop ET, which is converted to actual crop ET using crop coefficients. The FAO Penman–Monteith method, which is now accepted as the standard method for the computation of daily reference ET, is sophisticated. It requires several input parameters, some of which have no actual measurements but are estimated from measured weather parameters. In this study, we examined the suitability of fuzzy logic for estimating daily reference ET with simpler and fewer parameters. Two fuzzy evapotranspiration models, using two or three input parameters, were developed and applied to estimate grass ET. Independent weather parameters from sites representing arid and humid climates were used to test the models. The fuzzy estimated ET values were compared with direct ET measurements from grass–covered weighing lysimeters, and with ET estimations obtained using the FAO Penman–Monteith and the Hargreaves–Samani equations. The estimated ET values from a fuzzy model using three input parameters (Syx = 0.54 mm, r2 = 0.90) were found to be comparable to ET values estimated with the FAO Penman–Monteith equation (Syx = 0.50 mm, r2 = 0.91) and were more accurate than those obtained by the Hargreaves–Samani equation (Syx = 0.66 mm, r2 = 0.53). These results show that fuzzy evapotranspiration models with simpler and fewer input parameters can yield accurate estimation of ET