On 27 March 2018, the Finance Minister of Namibia presented the budget for 2019 to the parliament. The following tax proposals will be finalized in this budget for 2019:
- Phasing out the current tax incentive for manufacturers and exporters of manufactured goods and also phasing out the reduced 18% corporate tax rate;
- Repealing the Export Processing Zone and introducing the Special Economic Zones with a sunset clause for current operators with the EPZ status;
- Introducing a 10% dividend tax for dividends paid to residents to develop the fairness and equity of the tax regime;
- Proposing a worldwide basis of taxation for all income earned from foreign sources by Namibian residents and will have to declare such income in their annual tax returns;
- Introducing an exemption from income derived from commercial activities by charitable, religious, educational and certain other types of institutions, with such income subject to the standard corporate income tax 32% under Section 16 of the Income Tax Act;
- Disallowing the tax deduction of services, royalties and interest paid to non-residents when calculating taxable income, unless proof of withholding tax payment is provided; and
- Disallowing the tax deduction of mineral royalties paid by non-diamond mining entities when determining taxable income.
The date of entry into force of the tax proposals yet to be announced.
