Namibia: MPs Weigh in On Income Tax Amendment Bill
Members of Parliament (MP) have backed up the proposed Income Tax Amendment Bill, while raising concerns about its impact on ordinary taxpayers, government revenue and access to tax justice.
During a debate in the National Assembly on Wednesday, MPs welcomed proposed tax relief measures and the establishment of an independent Tax Court but called for improved taxpayer education, transparency and affordable dispute-resolution processes.
The contributions highlighted the need to ensure that the proposed reforms benefit workers and small businesses without compromising Government revenue or making it difficult for ordinary citizens to challenge tax assessments.
Lukato: employee tax deductions
Martin Lukato welcomed the proposed tax relief measures, including deductions for retirement contributions and education policies, saying they could improve employees’ disposable income and encourage long-term savings.
He also supported the proposed reduction of corporate income tax for qualifying small and medium enterprises (SMEs) to 20%, saying it could encourage business formalisation and economic activity.
However, he raised concerns about the taxation of retirement benefits and restrictions on employees offsetting losses from secondary businesses against their salary income. Lukato further questioned the proposed arrangements for employee tax refunds, warning that employers facing cash-flow difficulties could struggle to refund workers following retrospective tax adjustments. He called for more accessible tax services, particularly for workers outside major towns, and cautioned that penalties of up to 200%, together with interest, could place a heavy burden on taxpayers who fail to declare their income or fringe benefits correctly.
Atshipara: clarity on revenue implications
Modestus Atshipara supported the proposed reforms, particularly the establishment of a dedicated Tax Court and tax incentives aimed at supporting businesses and improving Namibia’s investment environment. He highlighted several proposed changes, including increasing the tax-free retirement fund lump-sum commutation limit from N$50 000 to N$375 000, introducing an annual cap of N$400 000 on housing benefits and reducing the corporate income tax rate for non-mining companies from 30% to 28%.
However, Atshipara questioned whether government had assessed the revenue implications of the proposed tax reductions.
He warned that reducing corporate tax rates without properly calculating the potential revenue losses could affect Government’s ability to fund public services adding that Government must ensure that efforts to attract foreign investment do not discourage local shareholders, pension funds and small investors.
Atshipara also called for adequate funding, judicial capacity and accessible procedures for the proposed Tax Court, stressing that taxpayers outside Windhoek should not be disadvantaged.
Lutuhezi: tax education and affordable justice
Lilian Lutuhezi supported the Bill but called for stronger taxpayer education, particularly among informal traders, young entrepreneurs and small business operators. She focused on three areas, namely taxpayer education, access to justice, independency and transparency of Tax Court.
She said many people operating businesses, including those selling goods through social media, might not understand their tax obligations, record-keeping requirements and customs procedures.
She urged NamRA and Ministry of Finance to provide simplified information through different media platforms and indigenous languages, as well as conduct outreach programmes in rural communities.
Lutuhezi also questioned whether ordinary taxpayers would be able to afford legal representation when challenging tax assessments before the proposed Tax Court.
She raised concerns about provisions limiting appeals to grounds stated in the initial notice of objection, warning that taxpayers without professional assistance could lose opportunities to raise legitimate arguments. She further questioned provisions relating to court costs and the non-public nature of court proceedings, calling for transparency and safeguards to protect taxpayers’ rights.
Busch: Tax Court must be operational without delay
Sharonice Busch supported the establishment of an independent Tax Court, describing it as a necessary intervention following the 2021 High Court judgment that declared the previous Special Tax Court arrangements unconstitutional.
She said taxpayers had been left without a specialised court to hear income tax and value-added tax disputes following the judgment.
Busch described the proposed reform as long overdue and urged Government to ensure that the court becomes operational without further delays once the legislation is enacted. She said the institution must be accessible, affordable, efficient and independent, warning that prolonged tax disputes could affect businesses’ cash flow, investment decisions and employment.
She also called for adequate judicial capacity and reasonable turnaround times to ensure that taxpayers receive timely decisions.
Thomas: Calls for relief from the tax burden
Festus Thomas supported the establishment of an independent Tax Court but argued that the Bill should also address the financial pressure taxation places on ordinary Namibians. He described the combination of Pay As You Earn deductions and Value Added Tax as a double tax burden, saying workers are taxed on their earnings and again when spending their remaining income.
Thomas called for an increase in the tax-free income threshold, arguing that the current N$50 000 threshold had not kept pace with inflation and the rising cost of living.
He also proposed zero-rating essential goods and services, including basic food, electricity, water and sanitary products, to provide relief to low-income households.
Thomas further called for a review of taxes affecting employment and small businesses, saying excessive taxation could discourage formal employment and business development.
By New Era.
