Ah Namibia, the world’s second least-populated country, and often not thought about much in terms of tax. However, there are some interesting developments that could be relevant to multinationals with operations there.

In terms of the general tax landscape, Namibia has a source-based system of taxation instead of a residency-based. This means that only income derived from a Namibian source is taxable in Namibia and this can give rise to interesting planning opportunities. Income is deemed to be of Namibian source when the income originates or is earned in Namibia, and not necessarily the place of payment.

The Namibian government is doing its best to attract inward investment, and as part of this has taken some major steps towards tax reform, which led to it being removed from the EU list of non-cooperative tax jurisdictions in 2018. As part of this clean-up, the Namibian government repealed benefits offered to manufacturers and companies in the Export Processing Zones, as well as tax benefits offered to Export Processing Zone companies.

In terms of recent developments, if you have outstanding taxes owing in Namibia, and have not yet registered as an e- filing user on the ITAS system, you may be in for some good news.

The Ministry of Finance issued a Media release on 4 November 2020, announcing a relief package for taxpayers with outstanding tax balances, with effect from 1 February 2021. The relief was aimed at supporting Namibian citizens and businesses facing hardship and cash flow problems exacerbated by COVID-19, and works as follows:

  • The Ministry will write off 95% of the interest balance and reverse all penalties for taxpayers who settle capital amounts owing, within a period of three months from 01 February 2021.
  • Although the above deadline has expired, the Ministry will also write off 75% of the interest balance and reverse all penalties for taxpayers who settle the capital amount within a period of twelve months from 01 February 2021.
  • No capital amount owing to the Namibian Revenue Agency (NAMRA) will be written off. 
  • All persons with outstanding taxes can partake in the relief program, which is applicable to all taxes administered by NAMRA.
  • To qualify for the relief, taxpayers should first register as electronic filers on the portal of the Integrated Tax Administration System (ITAS).
  • Upon registration as electronic filers, all outstanding tax returns must be filed electronically on all active tax accounts.

Although tight deadlines apply, the relief could still be useful to Namibian taxpayers who have not yet registered for electronic filing.

Namibia has lots to offer! – Thinking of investing there? Contact us.

Associated enterprises

How can we help?

How you structure your business is a critical question as you expand globally.  The right structure will protect your assets, improve your currency position, support your business operations, facilitate future business expansion and changes, and optimise your overall tax rate. Trying to unscramble a sub-optimal structure entered into in haste or without full consideration of relevant facts is complex and expensive, so it’s important to plan upfront.

Structuring an international business is both a science and an art – this is our specialist area of expertise. Regan van Rooy is an international tax and structuring advisory firm focussing on Africa. We have offices in South Africa, Mauritius and Ireland and we can help you with any international tax or structuring query.

Leave a Reply