Namibia's 2026-27 budget unveils comprehensive tax reforms, including accelerated depreciation for businesses, inflation-adjusted income tax brackets, e-invoicing mandates, and a 3.39% increase in sin taxes effective 25 February 2026.
Namibia’s Parliament has released the Budget Statement for the Fiscal Year 2026-27 on 26 February 2026, introducing significant changes to the tax code to support both individuals and businesses.
The key tax measures are:
Corporate and business incentives: New measures include a review of depreciation allowance (capital allowance) rules to support investment. Accelerated capital depreciation will allow businesses to deduct the costs of qualifying assets more quickly. Additionally, the government is considering a corporate social responsibility (CSR) tax deduction to incentivise private sector contributions to social causes.
Personal income tax: To combat “fiscal drag,” where inflation pushes earners into higher brackets, the government is updating tax rates and thresholds. These adjustments will be phased in over two financial years to ensure the system remains progressive and fair.
VAT and digital compliance: The government is modernising the VAT Act to improve legislative clarity and introduce e-invoicing. This digital shift aims to increase efficiency and reduce fraud. Specific amendments will also bolster priority sectors by easing the tax burden on agricultural input imports and the creative industry.
Transfer Pricing and tax avoidance: To align with international standards, mandatory disclosure for “aggressive tax planning” is being introduced, following the OECD/G20 Base Erosion and Profit Shifting (BEPS) Action 12.
Corporate restructuring: New “group relief” provisions will allow for neutral mergers and acquisitions within corporate groups, clarifying the treatment of properties to prevent tax hurdles during restructuring.
Special economic zones (SEZ): The 2026-27 budget reviews and updates the introduction of tax incentives to ensure they deliver on intended investment and job creation.
Excise duties: In accordance with the SACU Agreement, new excise duties—commonly known as “sin taxes”—officially took effect on 25 February 2026. These changes reflect a 3.39% increase across several categories:
- Tobacco products: Excise duties rose by NAD 3.39 cents for all products. A pack of 20 cigarettes increased from NAD 22.81 to NAD 23.58, while pipe tobacco rose to NAD 332.26 per kg, and cigars jumped to NAD 6,041.72 per kg.
- Alcoholic beverages: Sparkling wine is now taxed at NAD 19.68 per litre. Spirits increased to NAD 302.84 per litre of absolute alcohol, while malt beer and ciders both rose to NAD 149.98 per litre of absolute alcohol.
Additional tax reforms target petroleum, VAT modernisation: The 2026-27 budget introduces several additional tax measures, including amendments to the Petroleum Income Act to address sector developments, modernisation of VAT legislation to support agriculture and creative industries, and implementation of e-invoicing to enhance compliance and reduce fraud. The government is also streamlining taxation of international sporting event revenues.
Administrative deadlines and public sector investment: To enhance trade and compliance, the Namibia Revenue Agency (NamRA) will establish a Centralised E-Commerce Clearance Centre by 30 April 2026, designed to assist SMEs by reducing transaction costs and streamlining trade processes.
Regarding outstanding tax obligations, the government has set a final, non-negotiable deadline of 31 October 2026 for the Tax Amnesty Programme, urging all taxpayers to settle their debts before the window closes permanently.
