The article analyses the development of Namibia's system of taxation since independence in 1990. Drawing on the institutional literature derived from Western historical experiences, it suggests that politicians face four main constraints when seeking to increase revenue. These constraints relate to (a) the governments' bargaining position vis-à-vis their citizens, (b) the nature and capacity of the political institutions of government, (c) the structure of the economy, and (d) the international context. These four constraining factors structure the analysis of Namibia's tax policies since independence in 1990. Ten years after Namibia gained its independence from South Africa, the system of taxation is only marginally different from that established under colonial rule. This article argues that the SWAPO government has maintained a dualism of liberal economic policies and relatively progressive social policies due to the revenue windfalls from the Southern African Customs Union (SACU). Namibia's current tax base is challenged, however. The ongoing processes of regional and international trade liberalisation may reduce the revenues from SACU by one-third within the next few years. In the near future the Namibian government may therefore have to make a choice between extracting more revenues from its wealthy minority or widening the tax net to include a greater share of the population currently not included in the tax net. Based on the economic, political, institutional and international constraints on the government's revenue mobilisation, the article suggests that in the short run, there will be few ‘politically easy’ solutions open to the Namibian government.
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