NAMIBIA BUDGET SPEECH HIGHLIGHTS
The Minister of Finance, Hon. Calle Schlettwein, presented the 2018/19 Budget Speech to Parliament on 7 March 2018.
- The budget deficit is estimated at 4.5% of GDP in 2018/19, compared to 5.4% in 2017/18 and an average of about 3.6% over the Medium Term Expenditure Framework (MTEF).
- Inflation has been on a downward trend, slowing from 6.7% in 2016 to 6.2% in 2017 and now to 3.6% in January 2018 – in part due to weak domestic demand and a stronger currency.
- Total revenue for 2018/19 is estimated at N$56.70 billion.
- A total of N$ 972.02 million was collected from the recovery of outstanding tax arrears through the Tax Arrear Recovery Incentive Program (tax amnesty) that was announced in January 2017 and continued until 31 July 2017.
- Old age pensions are increased by N$50 to a monthly grant of N$1250.
- The main Tax proposals include:
- To reduce the lower individual tax bracket from 18% to 17% and introduce new tax rates of 39% and 40% for individuals earning over N$1.5 million and N$2.5 million respectively.
- To introduce a 10% dividend tax for dividends paid to residents.
- To subject income derived from commercial activities by charitable, religious, educational and other types of institutions under Section 16 of the Income Tax Act to normal corporate tax.
- To repeal of the Export Processing Zone Act and introduction of the Special Economic Zones, with a sunset clause for current operators with the EPZ status.
- Namibian residents will now have to declare all income earned from foreign sources in their annual tax returns.
- To introduce VAT on proceeds on the sale of shares or membership in a company owning commercial immovable property.
- Proposed new Tax Tables
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