The Finance Minister of Namibia on March 27, 2025, presented the 2025/2026 budget statement, which includes the following tax proposals.
- Corporate tax changes: The non-mining company tax rate would be reduced to 30% effective January 1, 2025, with a further reduction to 28% planned for fiscal year (FY) 2026/2027. Other measures include replacing the 3:1 thin capitalization ratio with a 30% limit on interest deductions, capping assessed losses carried forward, and introducing a 10% dividend tax effective January 1, 2026. An anti-avoidance provision is also proposed to address revenue leakage from substance loans disguised as preference shares.
- Special economic zones and SMEs: The Ministry of Finance, in collaboration with the Ministry of Industrialisation and Trade, is finalizing the special economic zones (SEZ) regime. The corporate income tax rate of 20% would extend to small and medium-sized enterprises (SMEs) meeting specific criteria, including an annual turnover below a predetermined limit.
- Individual tax adjustments: Adjustments to all tax brackets to counteract inflation would be postponed to FY 2026/2027 and FY 2027/2028. The retirement funds single commutation threshold at retirement would increase from N$50,000 to N$375,000. An annual benefit cap of N$400,000 on housing benefits would be introduced.
- Value added tax (VAT): The zero-rated supplies schedule of the VAT law would be amended to include state-acquired commercial properties. Additionally, VAT legislation on imported digital services is being finalized.
- Tax amnesty program: NamRA will continue with the final installment of the tax arrears relief program, whereby all interest and penalties will be written off if outstanding capital is settled in full by October 31, 2026. The relief is aimed at promoting the online filing of tax returns and the general use of the Integrated Tax Administration System (ITAS).
- “Sin” taxes: Effective March 12, 2025, excise duty increases would include an additional N$1.20 per liter of sparkling wine, N$5.53 per 750ml bottle of spirits, 64c for fortified wine, N$18.52 per liter of absolute alcohol, N$1.04 per pack of 20 cigarettes, and N$369.36 per kg of cigars.
Read a March 2025 report prepared by the KPMG member firm in Namibia