By: Dwight Links
Volume 5 of the Investment Guide series was released this week, with the latest installment focusing on the country’s regimes, its various tax laws and its tax agreements.
The guide was produced by the Namibia Investment Promotion Development Board with the tax expertise of PWC Namibia.
Julia Muetudhana, acting Chief Executive Officer of NIPDB, indicated that the Investment Guide series are aimed at being more than mere publications.
“When we launched the guides at the start of the year in March, with the first four volumes back then, it was our aim not for them to be publications only. It is grounded in the realities of taxation in the country,” Muetudhana said.
Another volume, Land Regulation, was unveiled in May with its focus on accessibility to land and the laws and acts that are binding on this asset for an investor to be aware of.
According to Muetudhana the latest guide is available to remove any uncertainty around the tax regimes in place in the country.
“It is there to demystify the understanding around our tax laws, and to provide clear intelligence to both domestic and foreign investors. We are confident this volume will reinforce Namibia as a premier investment destination,” she added.
The NIPDB currently has six out of the planned seven volumes available for an investor to access for decision making purposes.
The first four were the Country Profile, a look into who and where Namibia is located, The Investment Climate, where and how an investor can approach the various localities in the country.
Starting and Operating a Business, which looks at the processes and procedures to starting in the country, Banking and Foreign Currency, which highlights the aspects of banking services that can be expected from Namibia, and the Land Access, which is based in investing in one of the oldest assets in investment.
Nadine du Preez, Chief Legal Officer from the Namibia Revenue Agency (NamRA) reaffirmed that this volume is a critical tool for investors to be aware of.
“Before committing capital, normally investors will first assess the regulatory landscape of any country. They will evaluate the legal aspects and specifically taxation,” Du Preez emphasised.
According to the agency, investors would be looking into whether this particular side of an economy is predictable and can be navigated without hidden loopholes existing.
“Transparent, predictable and consistently applied laws reduce uncertainty, enable accurate financial planning, and allow businesses to make informed investment decisions with good confidence,” she added.
Du Preez also highlighted that when clarity is evident in tax laws, a country can be viewed as a low-risk market for operation by both local and international investors.
“When tax laws are clear, it reduces the perceived risk associated with investment and it encourages both foreign and direct local investment. Tax law and effective tax administration is the cornerstone of economic stability and good governance,” Du Preez highlighted.
Du Preez described that a fair tax system promotes healthy competition in an economy as it allows the organisations that are liable to these laws to focus on their operations and their markets.
“It also discourages tax evasion. It will ensure that businesses compete based on innovation, productivity and value creation rather than unequal tax treatment.”
THE GUIDE
Du Preez indicated that the volume covers the seven tax and customs laws that NamRA administers, and other taxations that are covered by other institutions.
The guide itself is spread over detailed chapters that emphasise the importance of each tax law and its implications on the operations of any business seeking to operate in Namibia.
The first two chapters are more like introductory segments on the basics of Namibia’s taxation landscape.
Chapter 1 speaks predominantly to the Income Tax Act of 1981, which is based on the salaried and monthly earnings of everyday personnel for an enterprise. While chapter 2 identifies NAMRA’s role in the administration of tax laws and affiliated regulations.
Chapters 3 to 8 focus on the kinds of entities or businesses that are to be expected in the Namibian economy who can be liable for taxation as an enterprise.
These also include a chapter on Trust and Estates, which are seen in the wider world of transparent business operations as barriers to identifying the ownership models of most enterprises who wish to operate in countries like Namibia.
Chapter 9 speaks to Value Added Tax, Chapter 10 is Other taxes that are administered by sister organisations in Namibia other than NamRA, and finally Chapter 11 cites the Tax Treaties that Namibia has in force between other nations.
Namibia has 11 tax treaties in effect around the world. The guide states that they are in Russia, South Africa, United Kingdom, France, Germany, Sweden, Mauritius, Malaysia, Botswana, India and Romania.
The NIDPB says that one more volume is outstanding which will complete the series but no specified timeframe has been indicated yet.
