On 19 February 2020, the Minister of Finance tabled the first income tax amendment bill of 2020 in Parliament that repeals the tax incentives applicable to registered manufacturers and export processing zones (“EPZ”).
For manufacturers, this includes the abolition of the 10-year reduced tax rate of 18% and the additional 25% deductions for training costs, export costs and transport costs for materials and components as well as imported equipment. For EPZ, this includes the abolition of the various tax exemptions for EPZ companies, including customs and excise duties, stamp duties, transfer taxes and income taxes, although the exemption would not be affected by VAT and import sales tax.
The bill meets the European Union (EU) requirements for Namibia’s removal from the list of non-cooperative jurisdictions, as such incentives are considered by the EU as harmful preferential tax treatment. The repeals will take effect from a date specified by the Minister in the State Gazette.
