GIPF to pay pensioners tax refunds in November

Government Institutions Pension Fund (GIPF) members will soon be able to breathe a sigh of relief.

The fund will be paying qualifying pensioners, spousal and child beneficiaries their tax refunds on 28 November.

GIPF chief executive Martin Inkumbi announced this in a press statement yesterday.

“Our members can now breathe a sigh of relief as all individual taxpayers will be exempted from paying tax on the first N$100 000 of their income, however, we ask for patience as the fund finalises the payment logistics,” he said.

This is in accordance with the new Income Tax Amendment Act, which was gazetted last month.

Pension fund payouts in Namibia are taxed as income, because pension deductions are made before taxation when an individual is employed.

Therefore that part of the individual’s income has not been taxed.

A statement from the Ministry of Finance and Public Enterprises last week said government employees will be paid out refunds on 7 October.

Finance minister Iipumbu Shiimi has said companies have until February to pay employees’ tax refunds.

The tax relief measure will see that Namibians who are paid N$100 000 and less per year would not be liable to be taxed, as the tax threshold was moved from N$50 000 to N$100 000.

Shiimi announced this during his budget speech in the parliament earlier this year.

To refund employees, employers will have to calculate how much money had been over-deducted from employees during this time and refund them with this amount.

These refunds will be deducted from the tax employees pay the Namibia Revenue Agency (Namra) monthly, implying no material decrease in employers’ financial statements.

This will continue until the over-deducted amount is offset.

Employers need not pay Namra until overpayment is recovered.

This will allow taxpayers to receive their refunds earlier, rather than waiting until February 2025 to file for a tax refund with Namra.