Namibia, Republic of

Increase in tax thresholds for individuals

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.

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 taxes. 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.