New tax reprieve effective October

Finance and public enterprises minister Ipumbu Shiimi says the revised income tax brackets are likely to take effect only in October, owing to legal requirements that must first take their course before implementation.Revisions to the income tax brackets were announced in February with the tabling of the budget for the 2024/2025 fiscal year.The new tax bracket stipulates that individuals earning a yearly salary of under N$100 000 per annum will no longer be subject to paying tax. Currently, all individuals who earn a salary of N$50 000 and upwards are subject to paying tax.Crafting new lawShiimi made these comments at the Government Information Centre this week, explaining that a legal process must be followed before the changes can take effect.“Because tax is a law, the law still has to be crafted. We have crafted the law now, so it went to Cabinet, it went to the legal drafters – it is now sitting with the legal drafters,” Shiimi said, providing an update on his ministry’s activities for the year thus far.The ministry of justice’s legal drafters are working on incorporating the changes into law. Following that, the amendment will be sent to the Attorney General (AG) for scrutiny before being further escalated to the National Assembly and National Council for consideration, Shiimi explained."The legal drafters will now make sure that it is in the legal language – once that happens, it is approved by the Attorney General, it is on its way to parliament. Once that happens, once it is approved, then it becomes a law, it is still a long chain of things that we have to follow,” the minister explained.More available cashReacting to the revised tax brackets when Shiimi made the announcement, the Namibia Investment and Promotion Development Board (NIPDB) said it would afford Namibians in the lower income tax brackets more disposable income.“The increase in the tax threshold from N$50 000 to N$100 000 and an inflation adjustment of 2.5% mean that many Namibians, especially those in the lower income brackets, will be able to have more disposable income, which consequently contributes to economic growth,” the NIPDB said.The reduction in corporate tax rates for micro, small and medium enterprises would also enable the growth of small business entities.“A reduced corporate tax rate for micro, small, and medium enterprises as defined from 32% to 28% shows the government’s commitment to encourage the growth of these entities. The introduction of a dividend tax at 10%, aligned with regional benchmarks, will broaden the tax base and eventually reduce the tax burden currently heavily carried by individuals through pay as you earn (PAYE),” NIPDB said.

New tax reprieve effective October

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New tax reprieve effective October

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