News Flash 29 March 2019 – NAMIBIA – 2019 Budget Speech

Namibia Budget Speech Highlights

The Minister of Finance, Hon. Calle Schlettwein, presented the 2019 Budget Speech to Parliament on 27 March 2019.

The budget deficit is estimated at N$8.2 billion or 4.1% of GDP and averaging 3.4% over the Medium Term Expenditure Framework (MTEF).
Inflation remains stable at 4.4% in February this year, after averaging 4.3% over 2018.
Total revenue for 2019/2020 is estimated at N$58.4 billion, 3.0% better than the estimated outturn for 2018/19 and 29.7% of GDP.
Expenditure as a proportion of GDP reduced from 42% to 34.9% in FY2018/19.
Old age pensions are increased by N$50 to a monthly grant of N$1300.

The main Tax proposals include:

Phasing out the current tax incentive for manufacturers and exporters of manufactured goods, 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 percent dividend tax for dividends paid to residents.
Subject income derived from commercial activities of charitable, religious, educational and other types of institutions under Section 16 of the Income Tax Act to normal corporate tax requirements.
Taxing all income earned from foreign sources. Namibian residents will have to declare such income in their annual tax returns.
Increase the tax deductibility of retirement fund contributions from the current N$40,000 per annum to 27.5% of income with a maximum of N$150,000 to encourage savings and provisions for retirement.
Disallow deductibility of fees and interest paid to non-residents for calculating taxable income until payment of withholding tax paid is proven.
Remove VAT zero-rating on sugar.
Disallow deductibility of royalties for non-diamond mining entities.
No changes in personal or corporate tax rates proposed.

Contact our legislation team at info@crs.co.za if you require any additional information.

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