Namibia 2012/2013 budget and tax proposals

The Namibian Finance Minister presented her budget for 2012/3 on 28 February 2012. The budget revealed no significant changes other than withholding tax of 25% on services provided by non-residents to residents of Namibia and the taxation of disposals of mineral licences.

New taxes

Withholding tax

Withholding tax of 25% on all management, consulting, technical, administrative and entertainment services paid by a resident to a non-resident, subject to the provisions of any Double Taxation Agreements with effect from 30 December 2011. The tax must be paid by the 20th day of the month following the month in which the tax is deducted or withheld. Affected Namibian residents should register for this tax by 20 March 2012.

Mineral licences

Proceeds on the disposal of a mineral licence or the right to mine minerals or the proceeds on the sale of shares in a company or close corporation that holds a mineral licence or the right to mine minerals are taxable with effect from 1 January 2012 for companies and 1 March 2012 for Trusts and individuals.

Ring fencing of loss making trades

Losses from certain “suspect trades” such as part-time farming and non-arms length property and asset leasing may be ring fenced subject to various formulae with effect from 1 March 2012. The onus of proof that the trade will produce taxable income in a reasonable period rests with the taxpayer. 

Tax rate increases

Non-resident shareholders’ tax increases from 10% to 20% for non-resident shareholders who hold less than 25% of the Namibian company paying the dividend with effect from 30 December 2011 subject to the provisions of Double Tax Agreements. 

Unchanged tax rates

The following rates remain unchanged:

Income Tax

Non-manufacturing companies   34%
Manufacturing companies  18% (for 1st 10 years)
Diamond mining and service companies 55%
Hard rock mining and service companies 37,5%
Oil and gas extraction 35% Plus additional profits tax
Individuals Zero on amounts < 40 000
37% on amounts > 750 000

Transfer duty on property acquired by:

Persons other than natural persons (including Trusts)  12%
Natural persons    Zero on amounts < 100 000
8% on amounts > 1 500 000

Value Added Tax

From 1 January 2012 medical and para-medical services provided by hospitals and medical practitioners were changed to exempt from zero rated supplies. This change in the nature of the supply will result in deemed output VAT becoming payable. 

Stamp duty

Stamp duty on transfer deeds on the purchase of immovable property changed on 1 January 2012 to the following:

Individuals Zero on values < N$400 000
N$10 on every N$1 000 or part thereof on values > N$400 000
Persons other than natural persons: N$12 on every N$1 000 or part thereof.

Proposed future tax increases

  • Environmental tax
  • Export levies on natural resources
  • Hard rock mining companies rate change and windfall tax
  • Transfer duty on the sale of shares and members’ interests in entities that own:
    • Property
    • Mining or prospecting rights or licences
    • Transfer duty on the sale of mining or prospecting rights or licences

Tax rates for individuals and Trusts

Taxable amount Tax Rate
Nil - 40 000 Nil Nil
40 001 - 80 000 Nil 27%
80 001 - 200 000 10 800 32%
200 001 - 750 000 49 200 34%
750 001  236 200 37%

Transfer duty rates for individuals

Value of property Tax Rate
Nil - 400 000 Nil Nil
400 001 - 800 000 Nil 1%
800 001 - 1 500 000 4 000 5%
1 500 001 39 000 8%