Farmers have welcomed the recent decision by government to exempt them from paying Value Added Tax on the importation of animal feed.
The Ministry of Finance relief granted in terms of Rebate Item 412.11 of the VAT Act and came into effect this week and provides exemption for the importation of goods, “for the relief of distress persons in cases of famine or other national disasters,” which in this case is farmers hard-hit by the drought.
The tax exemption which applies to individual farmers, communal and commercial farmers, exempts feeds such as lucerne hay, grass-teff, oats straw/hay, maize hay, Sorghum hay, silage, cotton cake, sunflower oil cake, maize chop, wheat brain, molasses among other from paying VAT when imported into the country.
“Retailers and other entities that import these goods do not qualify for this exemption and to qualify for the exemption, importers should notify the Ministry of Finance about the importation at least 3 days before the goods reach the point of entry at the boarder to enable timeous customs clearance,” Minister of Finance Calle Schlettwein said.
The Namibia Agricultural Union (NAU) welcomed the government decision, which it said will go a long way in providing much needed relief to farmers as they work towards saving their cattle herds from the devastating drought.
“We wrote the letter to the Minister and initiated the process on behalf of our members and everyone in the country considering the current conditions. We are glad that after meeting and engaging on the practically of the measure that it has been effected. Farmers are struggling at the moment with cash flow and any relief they can get will go a long way, and that 15 percent will help,” NAU Principal Officer Danie van Vuurien told the Windhoek Observer.
“The exemption will allow for farmers to spend more on feed imports and buy more now that they don’t have to pay the 15 percent and this measure is valid until the emergency declaration by government is lifted and this is most likely going to be when the next rains come.”
The finance ministry decision comes after President Hage Geingob in May this year declared drought a national emergency after the country failed to receive sufficient rains in most parts of the country, a position which negatively affected crops and animals.
In an effort to mitigate the negative impact of drought around the country, the government started receiving donations in cash and kind from foreign governments, international organisations, local corporate entities as well as individuals for the drought relief programme, while N$570 million was committed by government.
Farmers also came up with the Dare to Care campaign, an initiative of the Agricultural Union of Namibia (NAU) and the Namibia Emerging Commercial Farmers Union (NECFU), aimed at supporting all farmers across all regions through a subsidiary feeding scheme.