The new tax relief measures, through which domestic thresholds have been adjusted that will result in many Namibians qualifying for refunds, were gazetted on Monday this week. This means the implementation of the new tax regime, which is estimated to directly inject more than N$640 million into the pockets of Namibians, is immediate and the finance ministry expects it to be implemented without delay. 

The tax reform is aimed at providing much-needed financial relief to taxpayers, many of whom have been struggling with the rapid escalation in living costs during the last few years.

“The income tax amendments have been gazetted and we expect implementation of the proposal by employers and affected employees to begin immediately…The new thresholds were gazetted on 16 September 2024,” stated ministry of finance spokesperson, Wilson Shikoto.  

Responding to New Era queries, he stated: “We expect employers to refund over deductions of employees as soon as possible.” He continued that as per the guidance note, employers must implement the rates’ adjustment on their payroll systems as soon as possible after the law has been gazetted. 

The much-awaited tax relief measures, which exempt Namibians earning less than N$100 000 from paying Pay As You Earn (PAYE) tax, were announced in the national budget at the beginning of March this year. The new measures effectively mean that if an employee earns N$100 000 or less, they will not pay tax on their earnings. It also means that if an employee earns more than N$100 000, only the amount earned after the initial N$100 000 is taxable.

“In this regard, we will increase the threshold for income tax on individuals from the current
N$50 000 to N$100 000. This action will result in an injection of N$646 million directly into the pockets of taxpayers. Effectively, all individual taxpayers will be exempted from paying tax on the first N$100 000 of their income as of 1 March 2024,” Shiimi explained at the time. 

The eagerly-awaited tax refunds emanate from changes to PAYE tables during the tax year that must be adjusted by employers since the new rates have been gazetted. 

However, employees with small PAYE monthly payments that cannot be refunded by employers will have to claim their refunds from the Namibia Revenue Agency. 

Yesterday,  a local daily reported that many local businesses are concerned about the viability of making tax refunds from their own revenue. They expressed concern that paying the tax refunds from their own sources could result in bankruptcy for many smaller operations. – ebrandt@nepc.com.na