The minister of finance and public enterprises announced an amendment to the Income Tax Act that was effective 1 March, however, it was only gazetted this week.
This amendment will see taxpayers receiving refunds in October. This is how it will work:
In the past tax year, employers deducted Pay-As-You-Earn (PAYE) tax from employees’ salaries based on old tax rates. After the new tax rates were introduced, some employees may have been overtaxed.
An employee who earns N$350 000 annually under the old tax rates, will have to pay N$6 083 monthly in taxes, however, with the new tax adjustments they will only pay N$4 916.
Although the tax amendments were effective from 1 March, the law was only gazetted this week. This means that for seven months, the employee was paying an extra amount of N$1 166 every month.
In order to refund employees, employers will have to calculate how much was overdeducted. In this case, it was N$8 162 for seven months, and refund the money.
These refunds will be deducted from the PAYE that employees pay to Namibia Revenue Agency (Namra) monthly, therefore there is no material decrease in the employer’s financial statements.
This will continue until the over-deducted amount is offset. Employers need not pay Namra until the overpayment is recovered.
This will allow taxpayers to receive their refunds earlier, rather than waiting for February 2025 to file for a tax refund with Namra.
Compiled by: Shania Lazarus
Stay informed with The Namibian – your source for credible journalism. Get in-depth reporting and opinions for
only N$85 a month. Invest in journalism, invest in democracy –
Subscribe Now!
