The Namibia Chamber of Commerce and Industry (NCCI) maintains the government should seriously consider its recommendation for the introduction of a lower tax rate for smaller businesses with an annual turnover not exceeding N$2 million as part of measures to create a more business friendly environment.
NCCI CEO Charity Mwiya, in response to Finance Minister Ipumbu Shiimi’s midterm budget review, said although not all recommendations made to the government by the business grouping to create a pro-growth environment have been addressed, “Shiimi’s announcements are positive and welcomed by a beleaguered private sector where many businesses are still struggling to recover following the past two disruptive years.
“But as NCCI recommended to the government previously and repeated earlier this year, further reductions are required to achieve taxation parity with other countries in the SADC economic bloc”.
In the Medium-Year Budget Review presented by Shiimi in Parliament on Tuesday, the Minister announced that the non-mining company tax rate will be reduced by two percentage points, one percent annually over the two outer-years of the next MTEF.
“Although it remains higher in comparison to neighbouring countries, effectively, the tax rate reduces to 31% in FY2024/25 and to 30% in FY2025/26,” she said.
Mwiya, however, applauded the government for committing to increase the threshold for income tax on individuals from the current N$50,000 to N$100,000 thereby providing relief for low-income earners.
The NCCI’s CEO said the government fast tracking the implementation of a Business Rescue Fund is another commendable development.
“Minister Shiimi announced that the fund’s launch is slated for November when the procurement process for a pool of business rescue consultants will start. Initially the fund’s focus would be Development Bank of Namibia (DBN) clients, but it will be broadened to include other lending institutions, by a further allocation of funds in the 2023/4 fiscal year,” the business group CEO said.
Concerning other recommendations, Mwiya says NCCI asked for the write-off of the prescribed debt of road users.
She said despite indications that amendments will be made to the Road Fund Administration Act to facilitate such write-offs, reportedly bureaucracy is the cause of a delay.
Although voluntary registrations should still be accommodated, the NCCI also recommended that compulsory registration for value added tax (VAT) be applied to businesses with an annual turnover exceeding N$1 million.
