A critical analysis of the organisation for economic cooperation and development tax wedge methodology from a Namibian perspective

Abstract

The annual Taxing Wages publication, issued by the Organisation for Economic Cooperation and Development (OECD) contains details of the taxes paid on wages in the thirty member countries of the OECD. A calculation of the income tax and social security contributions paid by employers and employees as well as cash grants received by families is made, with the objective of illustrating how these amounts are determined in each country and to examine the impact of these amounts on the income of individuals. The analysis essentially facilitates the comparison of labour costs and the net take-home pay of individuals in the participating countries. The difference between labour costs and income ultimately received by individuals is referred to as the tax wedge. Namibia is not a member country of the OECD and has not previously participated in the taxing wages survey or performed the tax wedge calculation. This study analyses the tax wedge methodology of the OECD from a Namibian perspective in order to evaluate the applicability of the tax wedge methodology in the Namibian context. AFRIKAANS : Die Organisation for Economic Cooperation and Development (OECD) reik jaarliks ‘n verslag uit met inligting rakende die hoeveelheid belasting betaalbaar op salarisse en lone in die organisasie se dertig lid lande. ‘n Berekening van die inkomste belasting en maatskaplike voorsorgfonds bydraes deur werkgewers en werknemers, asook ontvangstes van regerings toelaes ter ondersteuning van families, word gedoen om te illustreer hoe bogenoemde bedrae bepaal word in elke land en hoe hierdie bedrae die beskikbare inkomste van individue affekteer. Die ondersoek fasiliteer ‘n vergelyking van die verwantskap tussen die arbeidskoste en die netto kontant salaris van individue in die deelnemende lande. Die verskil tussen die arbeidskoste en inkomste verdien deur die individue word die belastingwig genoem. Namibië is nie ‘n lidland van die OECD nie en het geen vorige belastingwig studies gedoen of ’n belastingwig vir Namibië bereken nie. Hierdie studie analiseer die belastingwig metodologie van die OECD uit ‘n Namibiese oogpunt om die toepaslikheid daarvan in die Namibiese konteks te evalueer.