The Minister of Finance and Public Enterprise, Ipumbu Shiimi on Tuesday announced that several key tax law amendments have been officially enacted.
Addressing the National Assembly, Shiimi said the Income Tax Amendment Act, Value-Added Tax Amendment Act, Transfer Duty Amendment Act, and Stamp Duties Amendment Act were signed into law by the President and published in the Government Gazette on Monday.
“The amendments are aimed at stimulating domestic demand through a menu of policy actions to boost household incomes and create a conducive environment for businesses to thrive and expand investments,” he said in a statement.
According to Shiimi, the Income Tax Amendment Act notably increases the tax exemption threshold for individuals from N$50,000 to N$100,000, effective 1 March 2024.
Due to this change, many employees experienced an over-deduction of Pay-As-You-Earn (PAYE) taxes for income earned between March and September 2024, he noted.
To address this issue, Shiimi explained that the Finance Ministry has issued a directive allowing employers to refund the excess PAYE by adjusting their future tax payments.
“Since the tax amendments were enacted in the middle of the financial year, the normal course of operation ought to be that employees would wait until the end of the tax year (28 February to 30 June 2025) to claim the PAYE over deducted from the Namibia Revenue Agency (NamRA) when filing their 2024/25 annual tax returns.
Shiimi reassured businesses that this process would not impose a financial strain.
“I would like to dispel the misconception that the directive for employers to refund PAYE could force businesses to close down. There is no truth in such an assertion. The ministry is requesting employers to deduct the PAYE reimbursements from the employee’s tax to be paid to NamRA. As such, on a net basis, there is no cash flow implications for employers,” he added.
Shiimi meanwhile, indicated that in exceptional cases where employers do not have sufficient employees’ tax payable from which amount they can deduct and refund employees, such employees will have to claim a refund when submitting their 2025 tax return between March 1 and June 30, 2025.
The minister concluded by further announcing that in addition to the tax relief through individual income tax, there is further relief for consumers through adjustments to the brackets for transfer duties and stamp duties which also takes effect in due course.
“We believe these amendments will go a long way to improve access to housing,” he said.
