Tax announcements eagerly awaited

PwC Namibia expects an array of tax announcements when finance minister Calle Schlettwein tables his mid-year budget review for 2019/20 in parliament this afternoon.Chantell Husselmann, tax leader at PwC Namibia, expects a proposal to remove the current zero-rating on the local sale and importation of sugar. This will result in value-added tax (VAT) on sugar being levied at a standard rate of 15%.Husselmann also anticipates the removal of current VAT exemption on asset management income earned by asset managers registered under the Stock Exchange Act.From a customs perspective she foresees an increase in the export levy on dimension stones, the expansion on export levies to include other agricultural, forestry and game products, as well as the introduction of an export levy on timber.“It is predicted that the above indirect tax proposed amendments would address the reduction of SACU [Southern African Customs Union] receipts over the coming years to some extent,” Husselmann says.Income taxJohan Nel, tax partner at PwC Namibia, anticipates more announcements on the tabling of several income tax amendments which Schlettwein mentioned in previous budgets.This includes the phasing out of preferential tax treatment for registered manufacturers, as well as the repealing of the EPZ Act, with the introduction of the Special Economic Zones framework.Nel also expects announcements on withholding tax on dividends paid to Namibian residents, the abolishment of the conduit principle used by trusts, from a tax perspective, as well as the taxing of commercial activities by charitable, religious and/or educational institutions.Furthermore, he expects more details on the taxing of foreign income, an increase in the deduction threshold on pension, provident and retirement annuity fund contributions for individuals, and the limitation on the deductibility of fees and interest paid to non-residents, where no withholding tax was withheld/paid.“We estimate that the above-mentioned amendments will be tabled and enacted during the next three to six months,” Nel says.Tax collectionRiana Esterhuyse, tax associate director at PwC Namibia, expects that there will be improved collection rates in the current fiscal year.This is due to the launch of the Integrated Tax Administration System (ITAS) earlier this year, which allows for the efficient filing of tax returns via an online platform. “However, with the postponed launch of the semi-autonomous revenue agency (Namra) to March 2020, it is anticipated that the collection targets may be placed under pressure for the 2019/20 budget year,” Esterhuyse says.

Tax announcements eagerly awaited

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Tax announcements eagerly awaited

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