The Minister of Finance, Hon. Calle Schlettwein, presented the 2019 Budget Speech to Parliament on 27 March 2019.

  • The budget deficit is estimated at N$8.2 billion or 4.1% of GDP and averaging 3.4% over the Medium Term Expenditure Framework (MTEF).
  • Inflation remains stable at 4.4% in February this year, after averaging 4.3% over 2018.
  • Total revenue for 2019/2020 is estimated at N$58.4 billion, 3.0% better than the estimated outturn for 2018/19 and 29.7% of GDP.
  • Expenditure as a proportion of GDP reduced from 42% to 34.9% in FY 2018/19.
  • Old age pensions are increased by N$50 to a monthly grant of N$1300.

The main tax proposals include:

  • Phasing out the current tax incentive for manufacturers and exporters of manufactured goods, repealing the Export Processing Zone and introducing the Special Economic Zones, with a sunset clause for current operators with the EPZ status.
  • Introducing a 10 percent dividend tax for dividends paid to residents.
  • Subject income derived from commercial activities of charitable, religious, educational and other types of institutions under Section 16 of the Income Tax Act to normal corporate tax requirements.
  • Taxing all income earned from foreign sources. Namibian residents will have to declare such income in their annual tax returns.
  • Increase the tax deductibility of retirement fund contributions from the current N$40,000 per annum to 27.5% of income with a maximum of N$150,000 to encourage savings and provisions for retirement.
  • Disallow deductibility of fees and interest paid to non-residents for calculating taxable income until payment of withholding tax paid is proven.
  • Remove VAT zero-rating on sugar.
  • Disallow deductibility of royalties for non-diamond mining entities.
  • No changes in personal or corporate tax rates proposed.