Namibia, Republic of

Income tax amendments

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:

• 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.

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

• Subsistence and travel 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, 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 employee taxes. There is also no need to reflect the allowance received on the PAYE5 certificates.
• Tax relief where employees are reimbursed for the actual business-related distance they travelled at a fixed rate / kilometre. Any reimbursement in excess of the ’prescribed rate‘ will be subject to employee taxes. The ’prescribed rates‘ have not been announced yet.

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

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 that 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.