NAMIBIA Law and Practice Contributed by: Nadine van Schalkwyk, Ralph Strauss, Bonita R de Silva, Ivo dos Santos, Chrissie Turck, Jané Louw, Nicole Freygang and Natasha Nekuta, Dr. Weder, Kruger & Haikali Inc.
5.2 Taxes Applicable to Businesses Namibia has a source-based tax system, taxing all income earned within the country. Corporate entities, including companies and close corporations, are subject to corporate income tax, VAT, employee tax (PAYE), annual duties, and with - holding taxes on dividends, interest, service fees, roy - alties and transfer tax. As at May 2026, Namibia has not enacted legislation implementing Pillar Two of the OECD’s Two-Pillar Solution, however active prepara - tions and assessments are underway. Namibia also does not appear on the OECD’s central record of juris - dictions that have implemented a qualified domestic minimum top-up tax (QDMTT) or a recognised safe harbour regime. 5.3 Available Tax Credits/Incentives Namibia provides a range of tax credits and incentives aimed at encouraging manufacturing, exports, youth employment and foreign investment and promoting economic growth. The main incentives are the foreign tax credit, youth internship allowance, manufacturing incentives, and export processing zones. The Foreign Tax Credit applies only to countries with a double tax treaty with Namibia and exempts tax - payers from Namibian tax on passive or cross-border income already taxed abroad, capped at Namibia’s tax liability, with proof of taxes paid required. The youth internship allowance allows employers to deduct intern stipends from corporate tax liability, provided they are tax-compliant, pay corporate tax - es, and have certified internship agreements. Interns must be Namibian citizens or hold valid study visas, aged 18–35, unemployed school leavers or graduates, and seeking work experience or completing work- integrated learning. Manufacturing incentives apply to businesses regis - tered with the Ministry of Industrialisation and Trade and approved by the Receiver of Revenue, with a via - ble business plan showing employment creation for Namibians. Namibia’s former export processing zone regime has been succeeded by the special economic
In such circumstances, employees may elect work - place union representatives. The number of repre - sentatives depends on the number of union members employed at the workplace and, in some cases, the size of the workforce. Workplace union representa - tives are responsible for representing employees in disciplinary and dismissal proceedings, raising con - cerns relating to working conditions, and engaging with management on labour and employment matters. Employers are required to allow reasonable access to the workplace and provide representatives with rel - evant information necessary to perform their functions effectively. In addition, employees may elect health and safety representatives in terms of the Labour Act. Employers are required to consult these representa - tives on workplace safety matters, employee welfare policies, and operational changes that may affect employees’ health or safety. The Namibian tax system is source-based. Therefore, employees are liable to pay tax on all income earned in Namibia. PAYE income tax as a fixed amount in addition to a percentage on a sliding scale that ranges from 0% to 37% per tax bracket is payable by employ - ees, while both the employee and the employer must contribute 0.9% each of the employee’s basic income to the Social Security Commission, subject to a cap. Employers, on the other hand, must pay Employees’ Compensation Fund contributions depending on the industry risk category, with PAYE being withheld and remitted by the employer to the Namibia Revenue Agency (NAMRA). Employers are also required to pay the Vocational Education and Training (VET) Levy, which is levied at 1% of the total annual payroll of Namibian-registered employers whose annual payroll amounts to NAD 1 million or more. The levy is used to fund national vocational education and training pro - grammes. 5. Tax Law 5.1 Taxes Applicable to Employees/ Employers
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