Schlettwein proposes amendments to income and VAT acts

The Minister of Finance Calle Schlettwein has proposed amendments to the Income Tax, Value Added Tax and Export Levy Acts as central reforms to efficiently mobilise domestic resources to finance sustainable development activities.

Schlettwein announced the proposed amendments on Tuesday in the National Assembly when he tabled the mid-year budget review for the 2019/20 financial year, noting that consultation process was done in respect of the proposals.

Amongst the proposed amendments includes, the taxation of trusts and certain commercial entities; eliminating certain base eroding exemptions and Value Added Tax (VAT) zero-rating of certain goods.

Further it includes, eliminating base eroding tax holidays and preferential tax rates accorded only to some manufacturers and exporters of manufactured goods for a more uniform treatment of taxpayers through the establishment of the Special Economic Zone.

In addition, proposals are made for Namibia to join international fora for exchange of information for tax purposes and ratify the Organisation for Economic Co-operation and Development (OECD) convention on Mutual Administrative Assistance as means of collaboration in international tax matters.

Tax policy and effective tax administration reforms are central to efficient domestic resources mobilisation that is needed to finance sustainable development activities, he noted.

Schlettwein further indicated that in the context of a subdued economic environment it is not the policy intention for general tax rate increases, adding that such relief would encourage economic agents to produce and invest.

He explained further that the amendments to the Export Levy Act are designed to expand the levy base to cover additional products as a means to incentivize value addition locally.

Necessary research and investigation will be made on the possibility of introducing a lower tax regime for small businesses as a means of encouraging entrepreneurship and business growth, he said.

He indicated that research has to be concluded within one-year to determine the impact on introducing several tax law amendments aimed at improving revenues from extraction sectors.

Source: Namibia Press Agency