Namibia, Republic of

Income tax amendments

1. The following income tax amendments were announced during the tabling of the national FY2025/26 annual budget. Kindly note that these proposals have not yet been gazetted, and no further details regarding their effective dates have been provided:

• The retirement fund single commutation threshold at retirement is proposed to increase from N$50,000 to N$375,000.
• An annual benefit limit of N$400,000 is proposed for housing allowances.
• Anti-avoidance provisions are to be introduced, under which preference shares will be deemed gross income and therefore not tax-exempt.
• The establishment of a dedicated tax court is proposed, with the requisite legislation expected to be tabled during the 2025/26 financial year.

2. Furthermore, certain directives were issued guiding the tax treatment of some new, and some longstanding, provisions, namely:

• Subsistence and Travel (“S&T”) allowances: Practice Note 1 of 2024, effective 9 December 2024, states that a subsistence allowance granted when an employee is required to spend time away from their usual place of work, and which does not exceed the amount provided for in the International Civil Service of the United Nations (“UN rates”) is, going forward, not taxable / subject to Employees tax. There is also no need to reflect the allowance received on the PAYE5 certificates
• It also provides tax relief where employees are reimbursed for the actual business-related distance they travelled at a fixed rate / kilometer. Any reimbursement in excess of the “prescribed rate” will be subject to Employees’ tax. The “prescribed rates” have not been announced yet.

3. Effective for all entities having a financial year commencing on or after 01 January 2024, the entity may claim an internship allowance under Section 17E, provided that (1) an internship agreement is (2) certified (3) by a designated authority. The list of designated authorities have been made available by the Ministry of Finance. Refer to section for the list for the list of designated authorities. 

Value-added tax (VAT) amendments

Some major changes to the VAT Amendment Act were announced in the tabling of the FY2025/26 annual budget. These are:

• Levying VAT on imported “Digital Services”;
• A VAT e-invoicing system to be introduced which will integrate and interface cash registers of businesses with the ITAS filing system. This is anticipated to be rolled out in April 2026
• Schedule of zero-rated commercial properties to be amended to include state acquired commercial properties.

These amendments have not been gazetted yet and it is uncertain when they will come into force.