Taxation needs representation, especially for SMEs
As we kick off the new year, a sense of intensity fills the halls of the Ministry of Finance and Public Enterprises. We are in the heart of “budget season” -that critical period when the Minister of Finance, Ericah Shafudah, and her team meticulously draft the national budget for the 2026/27 financial year. While spreadsheets are filled with billions of dollars, the true success of this budget will be measured by how well it reflects the voices of the people who power our economy.
The adage “no taxation without representation” is often associated with historical revolutions. In Namibia, however, it carries a far more practical economic meaning. It speaks to the idea that those who contribute to the national fiscus deserve a meaningful seat at the table when the rules of contribution are written. As the country looks to “turn the corner” and accelerate growth, the time has come to ensure that Small and Medium Enterprises (SMEs) are not only taxed but truly heard.
I have previously argued that SMEs are the primary engine of the Namibian economy. With an estimated 40,000 SMEs operating across the country — from the bustling stalls of Katutura to guesthouses in the north and farms nationwide — Namibia is, without doubt, an enterprising nation. This is something we should be immensely proud of and actively support. Collectively, these businesses account for nearly one-third of all jobs in Namibia.
When an SME thrives, the benefits ripple through its community. A local construction firm hires more young people; a boutique in Oshakati sources additional local fabrics; a small lodge in the Kunene region invests in solar energy. This “multiplier effect” is what transforms a budget from a document of debt and expenditure into a true blueprint for prosperity.
For many years, however, the primary hurdle facing these businesses has been a tax system that appears designed for large multinational corporations rather than the “little guy or girl”. While the non-mining corporate tax rate is on a welcome downward path towards 28%, for a business with only five employees, the administrative burden of compliance can be as heavy as the tax itself.
The concerns raised by the SME sector are not about refusing to contribute. They are about the capacity to contribute while still growing. High tax rates and complex filing systems strip away the very capital SMEs need to:
• Hire more staff and reduce youth unemployment.
• Invest in new technology and innovation; and
• Expand operations into regional markets.
The minister’s upcoming budget presents a golden opportunity to address these concerns. Encouraging discussions are already underway around a preferential 20% corporate tax rate for qualifying SMEs. Codifying this into the 2026/27 budget would send a powerful signal that the government has listened.
True representation in taxation means more than lower rates; it means recognising that taxation is a partnership. When SME voices are meaningfully integrated into the budget process, the government gains a broader, more resilient tax base. Representation must also include cutting red tape. By introducing further tax incentives for skills development and digital transformation, the tax system can become a tool for development, rather than merely a mechanism for collection.
With promising opportunities in green hydrogen, as well as oil and gas on the horizon, Namibia stands on the brink of a new economic era. For this wealth to be inclusive and sustainable, the “middle” of the economy must be strong and properly represented.
If the 2026/27 budget succeeds in balancing the need for national revenue with the need to ease the burden on small businesses, Namibia will do more than simply “turn the corner”. It will build an entirely new road to prosperity - one that could become the envy of the region. A budget that reflects the needs of the SME sector is a budget for every Namibian. It is a vote of confidence in our people, proof that those who are taxed are also represented, and a reminder that when entrepreneurs are given a seat at the table, everyone shares in the rewards.
The adage “no taxation without representation” is often associated with historical revolutions. In Namibia, however, it carries a far more practical economic meaning. It speaks to the idea that those who contribute to the national fiscus deserve a meaningful seat at the table when the rules of contribution are written. As the country looks to “turn the corner” and accelerate growth, the time has come to ensure that Small and Medium Enterprises (SMEs) are not only taxed but truly heard.
I have previously argued that SMEs are the primary engine of the Namibian economy. With an estimated 40,000 SMEs operating across the country — from the bustling stalls of Katutura to guesthouses in the north and farms nationwide — Namibia is, without doubt, an enterprising nation. This is something we should be immensely proud of and actively support. Collectively, these businesses account for nearly one-third of all jobs in Namibia.
When an SME thrives, the benefits ripple through its community. A local construction firm hires more young people; a boutique in Oshakati sources additional local fabrics; a small lodge in the Kunene region invests in solar energy. This “multiplier effect” is what transforms a budget from a document of debt and expenditure into a true blueprint for prosperity.
For many years, however, the primary hurdle facing these businesses has been a tax system that appears designed for large multinational corporations rather than the “little guy or girl”. While the non-mining corporate tax rate is on a welcome downward path towards 28%, for a business with only five employees, the administrative burden of compliance can be as heavy as the tax itself.
The concerns raised by the SME sector are not about refusing to contribute. They are about the capacity to contribute while still growing. High tax rates and complex filing systems strip away the very capital SMEs need to:
• Hire more staff and reduce youth unemployment.
• Invest in new technology and innovation; and
• Expand operations into regional markets.
The minister’s upcoming budget presents a golden opportunity to address these concerns. Encouraging discussions are already underway around a preferential 20% corporate tax rate for qualifying SMEs. Codifying this into the 2026/27 budget would send a powerful signal that the government has listened.
True representation in taxation means more than lower rates; it means recognising that taxation is a partnership. When SME voices are meaningfully integrated into the budget process, the government gains a broader, more resilient tax base. Representation must also include cutting red tape. By introducing further tax incentives for skills development and digital transformation, the tax system can become a tool for development, rather than merely a mechanism for collection.
With promising opportunities in green hydrogen, as well as oil and gas on the horizon, Namibia stands on the brink of a new economic era. For this wealth to be inclusive and sustainable, the “middle” of the economy must be strong and properly represented.
If the 2026/27 budget succeeds in balancing the need for national revenue with the need to ease the burden on small businesses, Namibia will do more than simply “turn the corner”. It will build an entirely new road to prosperity - one that could become the envy of the region. A budget that reflects the needs of the SME sector is a budget for every Namibian. It is a vote of confidence in our people, proof that those who are taxed are also represented, and a reminder that when entrepreneurs are given a seat at the table, everyone shares in the rewards.
