Namibia’s Ministry of Finance unveiled the 2025-26 budget on 27 March 2025, outlining several tax proposals, including corporate tax reductions, VAT changes, and higher excise duties.
Namibia’s national budget has risen to NAD 106.3 billion, marking an increase of NAD 6.2 billion compared to last year’s allocation of NAD 100.1 billion.
In FY 2025-26, total revenue and grants are projected to increase marginally to NAD 92.6 billion due to lower receipts from the diamond industry and a sharp decrease in SACU revenue. In FY 2026-27, total revenue is expected to grow steadily, mainly due to income tax on individuals, non-mining company tax and VAT.
The key tax proposals are as follows:
Corporate tax
- A reduction of the non-mining company tax rate by two percentage points from the current 30% to 28%, effective on 1 April 2026;
- The introduction of a 10% dividend to maintain tax neutrality will be effective 1 January 2026. To ease the tax burden, specific entities, including the government, pension funds, medical aid funds, and companies, will be exempt from paying dividend tax;
- Other key measures include a 30% limit on interest deductions and restrictions on carrying forward losses, effective 1 January 2026.
Value added tax (VAT)
- The VAT law’s zero-rated supplies schedule will add state-acquired commercial properties to the schedule of zero-rated commercial properties;
- The VAT regulations on imported digital services will be finalised to create a level playing field with domestic providers.
Special economic zones (SEZ) and SMEs
The government is finalising the Special Economic Zones (SEZ) framework, including the annual turnover threshold allowing SMEs to qualify for the reduced 20% corporate income tax rate under the proposed SEZ regime.
Sin taxes
Effective 12 March 2025, excise duty increases will include NAD 1.20 more per liter of sparkling wine, NAD 5.53 per 750ml of spirits, NAD 18.52 per liter of pure alcohol, NAD 369.36 per kg of cigars, and NAD 1.04 per pack of 20 cigarettes.
Tax amnesty programme
The Namibia Revenue Agency (NamRA) will proceed with the final phase of the tax arrears relief program, offering complete write-offs of interest and penalties if outstanding capital is paid by 31 October 2026.
Other tax reforms
Anti-avoidance measures will be enhanced with regulations on hybrid equity instruments, which disguise debt as equity to avoid paying tax on interest income, especially in financial services. The goal is to align with the rest of the world on anti-avoidance on the BEPS projects.
