Rédaction Africa Links 24 with Shania Lazarus
Published on 2024-03-06 17:00:00
Namibians who earn N$100,000 or less per year will benefit from the tax exemption recently announced by Minister of Finance and Public Enterprises, Iipumbu Shiimi, but they will have to wait about 90 days to see the impact. The tax breaks include exempting the first N$100,000 earned by employees from Pay-As-You-Earn (PAYE) tax. Shiimi raised the tax threshold from N$50,000 to N$100,000 during his budget speech in parliament, effectively doubling the tax-free bracket for those within that income range.
Although the new tax threshold is effective from 1st March, it still needs to be gazetted before it can be implemented. Oscar Capelao, the Deputy Executive Director of Finance and Public Enterprises, emphasized that while Shiimi declared the new threshold, it still requires parliamentary approval. The tax year runs from 1st March to the end of February for individuals, so even though the announcement was made recently, it is considered effective from 1st March due to existing legislation.
Capelao explained that the proposed amendments will be submitted to the Ministry of Justice for review and gazetting. Once approved by parliament and gazetted, the changes will officially become law. The process is expected to be completed within the next 90 days, similar to how the tax table was last changed in 2013.
During this transition period, taxpayers who have overpaid taxes between March and the official gazetting will be entitled to a refund. Employers will be responsible for making adjustments to their payrolls accordingly. Employees will receive refunds from their employers for any overpayments they made, aligning their tax deductions with the new tax bracket. This process will help reduce the administrative burden on the Namibia Revenue Agency (Namra).
The Ministry of Justice spokesperson, Edmund Khoaseb, assured that the gazetting process should not take long once instructions are received. Typically, gazetting happens within the same week the instructions are received, usually on Fridays. Once gazetted, the new law takes immediate effect, in this case, impacting the tax exemptions for low-income earners.
PwC tax expert Johan Nell advised that employers should handle back payments to employees to streamline the process and reduce the administrative burden on Namra. By adjusting employee taxes based on the new tax threshold outlined in the Government Gazette, employers can ensure a smooth transition and accurate tax deductions.
In conclusion, the tax exemption announced by Minister Shiimi will benefit low-income Namibians, but they will have to wait approximately 90 days for the changes to take effect. Employers will play a crucial role in adjusting payroll deductions and issuing refunds to employees who have overpaid taxes during the transition period. The Ministry of Justice will oversee the gazetting process to formalize the new tax exemptions and ensure compliance with the law.
Read the original article on The Namibian
