TAX POLICY UNIT - MOF
Directorate
Tax Policy Unit (TPU)
Ministry of Finance
Director: Tax Policy Unit
Role
The Tax Policy Unit (TPU) is responsible for advising the Minister of Finance on tax policy issues. As part of this role, TPU must design tax instruments that can optimally fulfil a revenue-raising function and grow the economy.
Administration
These instruments are then administered by NAMRA (Namibia Revenue Agency).
Namibian Tax System
Namibia has a source-based income tax system. Residents and non-residents are taxed on their income from a Namibian source, subject to certain exclusions. Non-residents can have relief under Double Taxation Agreements.
Tax Types & Systems
Personal Income Tax (PIT)
PIT is one of government's main sources of income. Tax is levied on residents' source income, with appropriate relief to avoid double taxation. Non-residents are also taxed on income from a Namibian source.
Tax is levied on taxable income — gross income less exemptions and allowable deductions. Individuals generally receive income as salary/wages, pension/retirement payments, and investment income. Some individuals may also have business income taxable as personal income (e.g. sole proprietors and partners).
Corporate Income Tax (CIT)
CIT is imposed on companies resident in Namibia — incorporated under the laws of, or effectively managed in, the country — which derive income from within Namibia.
Non-resident companies operating through a branch or permanent establishment in Namibia are taxed on all income from a Namibian source. Companies operating in the resources sector are subject to a higher CIT rate.
Transfer Duty
Transfer Duty is levied on the value of any property acquired by any person by way of a transaction or in any other way. For this purpose, "property" means land and fixtures, including real rights in land, rights to minerals, shares in a residential property company, or shares in a share-block company.
All conveyancers are required to register with NAMRA.
Value-Added Tax (VAT)
VAT is an indirect tax on the consumption of goods and services. Revenue is raised by requiring businesses to register for VAT and charge VAT on supplies. VAT is non-cumulative — a credit/deduction is allowed for VAT paid in previous stages of the production and distribution chain.
VAT Registration Requirements
Registration is compulsory where the value of taxable supplies exceeds N$1 million in any consecutive 12-month period. The standard VAT rate is 15%, with a limited range of goods and services zero-rated or exempt.
Southern African Customs Union (SACU)
SACU consists of Botswana, Lesotho, Namibia, South Africa and Eswatini. The SACU Secretariat is located in Windhoek, Namibia. Established in 1910, SACU is the world's oldest Customs Union. A new agreement was signed in 2002 following negotiations that started in 1994.
Member states form a single customs territory in which tariffs and other barriers are eliminated on substantially all intra-SACU trade for originating products, with a common external tariff applying to non-members.
Excise duties are levied on certain locally manufactured goods and their imported equivalents. Specific excise duties apply to tobacco and liquor; ad valorem excise duties apply to motor vehicles, cellular telephones, electronics, and cosmetics.
Customs Duty
Customs duties are imposed by the Customs and Excise Act of 1964. Ordinary customs duty is a tax levied on imported goods, usually calculated on the value of goods imported and collected by the customs unit within NAMRA & SARS.
Member states' annual revenue shares are determined and approved by Council in December for distribution during the subsequent year.
SACU Revenue Sharing Formula
Customs Component
Allocated based on each country's share of intra-SACU imports.
Excise Component
Allocated based on each country's share of Gross Domestic Product (GDP).
Development Component
Fixed at 15% of total excise revenue, distributed by the inverse of each country's GDP per capita.
Treaty Negotiations & International Tax
International tax law expertise is required for dealing with international taxation — including negotiating bilateral tax treaties, considering appropriate source rules, anti-avoidance rules (thin capitalisation and controlled foreign company rules), and transfer pricing.
This process requires knowledge of the costs and benefits of certain provisions in a tax treaty, calling for specific data analysis by the TPU.
Governance & Placement
Placing the tax policy function within the Ministry of Finance has two main advantages.
Fiscal Policy Alignment: It is consistent with the Ministry of Finance's general responsibilities for fiscal policy and macroeconomic management. TPUs in the Ministry of Finance are often part of a wider fiscal policy unit formulating both tax and expenditure policy.
Policy Independence: Revenue administrations may be naturally more risk-averse to policy changes — especially frequent ones — that necessitate substantial adjustments to administrative and IT systems. Locating the TPU in the Ministry avoids this constraint.
Contact Information
Latest Announcement
The Ministry of Finance announces a reduction in Export Levy on Skins and Hides: raw skins and hides reduced from 60% to 15%; pickled skins from 15% to 10%. The approach balances retaining hides for domestic value addition while allowing export of excess production as an additional revenue stream for producers.
Latest Announcement
The Ministry of Finance announces a reduction in Export Levy on Skins and Hides: raw skins and hides reduced from 60% to 15%; pickled skins from 15% to 10%. The approach balances retaining hides for domestic value addition while allowing export of excess production as an additional revenue stream for producers.