The Minister of Finance tabled the national budget on the 28th of February 2024. The budget did not contain many new proposed tax policies and dealt mostly with the implementation of previously introduced tax policy proposals aimed at providing tax at providing tax liability relief to increase domestic demand and expand the tax base of the economy.
This Alert summarizes the key tax highlights from the Budget.
Corporate Tax
To enhance the Namibian tax system’s competitiveness and attract potential investors and to increase development within the private sector, the government intends to implement the following changes, some of which are effective from 1 January 2024.
Gradual decrease in the corporate tax rate for non-mining companies as follows:
- From 32% to 31%, which came into effect on the 1st of January 2024;
- From 31% to 30%, effective as of the 1st of January 2025; and
- From 30% to 28%, during the 2026/27 financial year.
Proposed buildings improvement deduction, by introducing a capital allowance of 10% per year on the costs of the buildings erected, added to, extended or improved and which are used for trade purposes.
Removal of exemption from non-resident shareholders tax (NRST) for foreign insurance companies during the 2024/25 financial year so that such non-resident shareholders will be liable for tax.
Introduction of a Special Economic Zones (SEZ) regime in terms whereof participants and SMEs with an annual turnover below a pre-defined threshold will pay corporate income tax at a rate of 20% and their supplies will be zero-rated for VAT purposes. The SEZ bill is expected to be tabled in the National Assembly during the 2024/25 financial year.
Creation of a new incentive titled “My First Job”, an Internship Tax Incentive Program aimed at encouraging employers to implement internship opportunities for graduates in their respective fields in exchange for an additional corporate tax deduction.
Personal Taxes
Increase of the tax threshold for individuals from N$ 50 000.00 to N$ 100 00.00 per annum, effective 1 March 2024. Revised tax tables are still to be published officially.
Value-Added Tax (VAT)
The VAT rate remains unchanged at 15%.
Increased of the mandatory registration threshold from N$ 500 000.00 to N$ 1 000 000.00 of taxable supplies in a 12-month period.
Transfer Duty and Stamp Duty
Increase in both the transfer duty and stamp duty brackets, from N$ 600 000.00 to N$ 1 100 000.00. Additionally, the threshold to trigger the transfer duty rate of 8% will be increased to N$ 3 150 000 during the 2024/25 financial year.
Introduction of a supertax transfer duty and stamp duty bracket will be introduced for residential properties valued above N$ 12 000 000.00.
Tax Administration
The final phase of the Tax Amnesty Program will continue until the 30th of October 2024. This allows taxpayers with outstanding taxes to have their interest and penalties fully written off if they pay their outstanding taxes before the 30th of October 2024.