On 28 February 2024, Namibia delivered the 2024/25 Budget. The key tax provisions in the budget statement include:
Individual income tax
The 2024/25 Budget increases the threshold for the individual income tax from NAD 50,000 to NAD 100,000, effective 1 March 2024. Other adjustments in the tax brackets are as follows:
- up to NAD 100,000 – 0%
- NAD 100,001 to 150,000 – 18%
- NAD 150,001 to 350,000 – 25%
- NAD 350,001 to 550,000 – 28%
- NAD 550,001 to 850,000 – 30%
- NAD 850,001 to 1,550,000 – 32%
- NAD 1,550,001 and over – 37%
Non-mining company tax rate
The non-mining company tax rate will decrease from 32% to 31% starting on 1 January 2024. The tax rate will be further reduced to 30% from 1 January 2025. Additionally, the non-mining company tax rate has been proposed to be reduced to 28% for FY 2026/27.
Measures to broaden the tax base
- Substituting the 3:1 thin capitalization ratio with a new limit on interest deductions at 30% of taxable income before net interest, regardless of origin;
- Limiting assessed losses carried forward to 5 years for regular companies and 10 years for natural resources sector firms;
- Introducing a 10% dividend tax from 1 January 2026 to address discrepancies in the investment sector.
Elimination of the tax exemption for non-resident shareholders
The tax exemption provision available to non-resident shareholders (on dividends) of foreign shareholders of insurance companies has been eliminated starting in the FY 2024/25;
Other tax measures include:
- Implementing a Special Economic Zones (SEZ) regime in 2025, offering a corporate income tax rate of 20% for SEZ participants alongside VAT zero-rating;
- Enforcing a 20% corporate income tax rate for small and medium-sized enterprises (SMEs) with annual turnover below a set threshold;
- Increasing the mandatory VAT registration threshold from NDA 500,000 to NAD 1,000,000;
- The implementation of a VAT electronic invoicing (e-invoicing) system;
- “Sin taxes” or excise taxes on alcoholic beverages and tobacco products will be increased;
- Adjustments to transfer duties and stamp duties brackets will be introduced, which include increasing the exempt level to N$1.1 million and raising the threshold for the 8% duty rate to N$3.15 million for FY 2024/2025;
- A supertax transfer duty and stamp duty bracket will be established for luxury residential properties valued at over N$12 million.
