Namibia | Income Tax Amendment Act, 2024 Promulgated

Namibia | Income Tax Amendment Act, 2024 Promulgated

The Income Tax Amendment Act, 2024 was approved by Parliament and published in Government Gazette 8442 on 16 September 2024. The updated tax rates, detailed in paragraph 1 of Schedule 4 to the Income Tax Act, 1981, will be effective starting 1 March 2024.

The following tax measures will affect payroll for the 2024/2025 tax year:
  1. Personal income tax bracket adjustments
  2. The annual tax-free threshold to increase from N$50 000 to N$100 000
Personal Income Tax Rates and bracket adjustments:
Annual tax tables for individuals:

Taxable income

Rates of tax 2024/2025

N$0 - N$100 000

0%

N$100 001 - N$150 000

18% of the excess over N$100 000

N$150 001 - N$350 000

N$9,000 + 25% of the excess over N$150 000

N$350 001 - N$550 000

N$59,000 + 28% of the excess over N$350 000

N$550 001 - N$850 000

N$115,000 + 30% of the excess over N$550 000

N$850 001 - N$1 550 00

N$205,000 + 32% of the excess over N$850 000

N$1 550 001 and above

N$429,000 + 37% of the excess over N$1 550 000

General Notice (09/2024) PAYE Deduction Reimbursements:
The Minister of Finance and Public Enterprises issued a general notice to clarify the process for handling over-deductions and reimbursements. The notice covers the following points:
  1. Adjustments for Over-Deductions: Employers must correct any PAYE over-deductions made before the new tax rates took effect. This adjustment follows paragraph 12A of Schedule 2 to the Income Tax Act, 1981.
  2. Reimbursement Process: Employers must reimburse employees if the new tax rates result in over-deductions. The reimbursed amount will be deducted from the PAYE payable to the Namibia Revenue Agency (NamRA).
  3. Objective: The aim is to ensure that PAYE deducted during the 2024/25 tax year matches the amount required under the new tax rates.
  4. Tax-Exempt Threshold: If the employer’s total PAYE for the adjustment month is insufficient to cover the total PAYE refunds due to the employees, those earning less than the revised annual tax-exempt threshold of N$100,000 will need to claim any refund on their 2024/2025 income tax return. In such cases, the system will not automatically adjust the refunds, and manual intervention will be necessary.
  5. Change of Employment: Employees who have changed jobs during the tax year and no longer work for their previous employers will also need to claim any refund when filing their 2025 income tax return by 30 June 2025.
Please note:
We are awaiting confirmation on whether the ITAS portal will accept negative PAYE values on the ETX return to align with the published notice. Additionally, we are seeking clarification on whether these adjustments can be applied in either September or October for employers who have already finalised their September payrolls once the new tax tables are released. We will provide further updates as soon as we have more information.

Attached are Government Gazette 8442 (Gov N264) and General Notice 09/2024.

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