Unlocking the Budget 2014/15
Inclusive Growth & Sustainability
Namibian Tax Alert 04/2014
In this budget edition of our newsletter we summarise some economic and tax comments made by the Honourable Minister of Finance, Saara Kuugongelwa-Amadhila, during the reading of the 2014/2015 Budget Speech.
Budgeted revenue and expense breakdown
Total actual revenue for 2012/2013 was N$ 37.9 bllion (of which tax revenue was N$ 35.3 billion) and estimated total revenue for 2013/2014 is N$ 40 billion (of which tax revenue is predicted to be N$37.5 billion). Budgeted revenue for 2014/2015 is N$ 52.4 billion (of which tax revenue is estimated to be N$ 49.2 billion).
Corporate Income Tax
The non-mining company tax rate will reduce further from 33% to 32% during 2014/2015. The reduced rate is aimed at encouraging investments in Namibia. The rate still needs to be gazetted as law and the effective date will only be known at that time.
Value Added Tax (VAT)
The Minister once again announced an increase in the VAT registration threshold from N$ 200 000 to N$ 500 000. The effective date of this change has not been provided and will have to be published in the government gazette before it will become effective. The full impact of the increase in the registration threshold will become known once the amendment is promulgated.
The Minister confirmed the finalisation of the export levy Bill, aimed at the promotion of domestic value-addition in the primary commodity and natural resources sectors. Indications are that the Bill will be promulgated during the first half of 2014 and rates will be published in the government gazette.
The Minister will also table the environmental levy bill in respect of carbon taxes, levies on light bulbs and motor vehicle tyres during the course of 2014. The effective date of these rates has not been provided and the rates will have to be published in the government gazette before they will become effective.
Tax policy and administration reforms announced in the 2013/2014 budget lowered the tax burden, broadened the revenue base and enhanced compliance. In an effort to continue with the reforms Cabinet has approved the establishment of a semi-autonomous Revenue Agency. The transitional process will occur over the next 36 months.
The Minister once again called on taxpayers to settle all outstanding tax balances before statutory measures are enforced.
Government is investigating the introduction of a presumptive tax for small businesses. A presumptive taxation system is generally one where the income of the business is assumed and taxed accordingly. It is therefore a simplified system and can reduce the cost of compliance by the taxpayer as well as the tax administration cost.
Capital Gains Tax
The Minister further announced that they are investigating the introduction of capital gains tax. No details were provided regarding the scope, rate and timing of this proposal.
Transfer Duty and Stamp Duties for natural persons
No changes to the transfer duty and stamp duty rates were announced.
The introduction of transfer duties on the sale / membership in property owning companies / close corporations are still in development but no further details were provided in the budget.
Individual Income Tax
No changes to the individual income tax rates were announced. This means that the tax rates will remain as follows:
|Range||Tax On Lower Amount (N$)||Percentage Tax On Excess Over Lower Amount|
|0 - 50 000||0||0|
|50 001 - 100 000||0||18%|
|100 001 - 300 000||9 000||25%|
|300 001 - 500 000||59 000||28%|
|500 001 - 799 999||115 000||30%|
|800 000 - 1 500 000||205 000||32%|
|1 500 001+||429 000||37%|
No changes were announced in respect of exchange control regulations.
The 2014/2015 excise duty rates will be reviewed in line with the provision of the SACU Agreement. The South African Minister of Finance will announce these rates on the 26th February 2014.