NAU, Napha Investigate Tax Implications

THE Namibia Agricultural Union and Namibia Professional Hunting Association says the proposed tax amendments can have far-reaching consequences on the farming and game sectors in the country.

The executive managers of NAU and Napha, met some tax experts recently to discuss the finer details of the proposed tax amendments.

The proposed tax amendments include capital gain tax, tax on primary products, environmental tax and training tax (VET – Vocational Education and Training).

“Even though it is the general feeling of tax consultants that the costs with regard to capital gain tax is much more than the aantages they get from it, the government is busy to investigate it according to the Minister of Finance. If it will be implemented, all capital items will have to be valuated to serve as basis for the future determination of capital gain if the assets should be sold,” NAU said in a statement.

At this stage tax on primary products is only applicable on minerals, fish, game and oil and gas.

“In the case of game it is not clear whether the definition will include live game and game products. If this is the case, it can have a negative effect on all farmers in the country. This aspect will be followed up,” NAU said.

NAU informed members owning close corporations or companies to take note that if proprietor compensation is not administered properly, it could have an effect on the salary account of the relevant close corporation or company and if it is more than N$1 million per annum, such an entity will be responsible for the payment of training tax.

In the proposed tax amendment it is also mentioned that the VAT registration threshold be increased from N$200 000 to N$500 000.

“Unfortunately the amendment does not make any provision for voluntary VAT registration and any de-registration of VAT could have big cash flow consequences for the members of the NAU and Napha,” the statement said.

NAU said one of the experts, Cameron Kotze undertook to give an explanation of the specific implications which the legislation might have on the agricultural and game sectors which will be circulated to members of the NAU and Napha.

Source : The Namibian