Netflix, apps may face VAT charges

Namibia will be finalising value added tax legislation (VAT) on imported digital services in the 2025/26 financial year.

This is one of the tax policies proposed by the minister of finance and social grants management, Ericah Shafudah, during the recent tabling of the 2025/26 national budget in parliament.

If implemented, when Namibians buy digital products online from companies outside the country, those companies will be required to charge VAT making those products more expensive for consumers. These digital products include streaming services such as Netflix, apps and online courses.

According to Shafudah, this will create an even playing field for all companies and broaden the country’s tax base.

“Finalising the VAT legislation on imported digital services will even the playing field with domestic service providers, considering the exponential growth noted in the consumption of digital services.”

Shafudah said enhancing the competitiveness of the tax system will attract investments and foster private sector development.

Another key amendment targets housing benefits, introducing an annual tax benefit cap of N$400 000.

Shafudah said this aims to improve fairness across different income brackets and between employer groups in the private and public sectors.

Additionally the ministry proposed an anti-avoidance provision to tackle tax avoidance schemes involving loans disguised as preference shares.

Some companies use preference shares in a way that resembles loans which usually have tax benefits, at a cost to the government of about N$41 million annually.

“The ministry will be introducing an anti-avoidance provision to ensure that substance loans disguised as preference shares are deemed income and not tax-exempt to stem revenue leakage,” said Shafudah.