Namra contributes huge chunk of state revenue

The Namibia Revenue Agency (Namra) contributed a significant chunk of the revenue of about N$90,4 billion collected by the treasury in the ongoing financial year.

While announcing his 2024/25 budget and the subsequent three-year medium term expenditure framework last week, finance minister Iipumbu Shiimi lauded Namra for a stellar job in collecting tax due to the state.

Shiimi said Namra also needs to be assisted with full implementation of the compliance laws in order to collect revenue in the forms of taxes, duties and fees, as prescribed in relevant tax, customs and excise laws.

Shiimi allocated N$355,8 million to the agency in the 2023/24 financial year and N$200,5 million has been estimated for the 2024/25 financial year for Namra to execute its fiduciary duties.

In the third quarter of the current financial year, Namra collected a net amount of N$56,9 billion, which translates to 80% of the total revenue target for the 2023/2024 financial year.

Shiimi said Namra has taken measures that have improved Namibia’s fiscus.

“Strong gross domestic product growth and improved tax administration measures by Namra have led to significant improvements in revenue streams and key fiscal indicators,” he noted.

The budget includes a one-off provision of N$1,4 billion to settle the legacy tax liabilities of several public enterprises whose funding was impacted by previous fiscal consolidation efforts.

These include entities like the University of Namibia (Unam) and the National Fishing Corporation of Namibia (Fishcor).

“This is an exceptional one-off exercise to clear legacy debt accumulated before Namra’s establishment,” said Shiimi.

“It allows Namra to apply the law to all taxpayers equally. Going forward, the treasury will not offer support for any future tax liabilities accumulated by public enterprises.”

The breakdown of this achievement reveals that Namra collected gross revenue of N$64,4 billion, with N$7,5 billion refunded between April and December 2023.

Furthermore, to enhance Namibia’s competitiveness regionally and align with global trends, the non-mining company tax rate will be further reduced to 28% in the 2026/27 financial year.

However, to maintain revenue neutrality, this reduction will be accompanied by measures to broaden the corporate income tax base, which include replacing the current 3:1 thin capitalisation ratio with a 30% limit on interest deductions.

“These proposed reforms are expected to enhance corporate tax compliance and ease the administrative burden on Namra, resulting in additional tax revenue exceeding N$600 million per year,” said Shiimi.

Looking ahead, the ministry, in collaboration with Namra, plans to implement a VAT e-invoicing system, integrating cash registers with the Integrated Tax Administration System (Itas).

This digitilisation initiative aims to improve tax data collection, analysis and monitoring, while reducing administrative costs and minimising VAT fraud.

Shiimi urged taxpayers to take advantage of the final extension of the Tax Amnesty Programme, which waives interest and penalties on outstanding tax liabilities settled by 30 October.

“This is the final extension.

We urge all concerned taxpayers to participate before the deadline, as we will not offer any concessions afterward,” he said.