Commercial tax coming for churches, NGOs

21 October 2019 | Local News

KENYA KAMBOWE

A law that would compel churches, NGOs and charitable organisations to pay taxes on income made from commercial activities will soon be drafted and tabled in parliament for debate.

During the March 2018 budget speech, Finance Minister Calle Schlettwein dropped the bombshell when he announced the ministry’s plan to amend Section 16 of the Income Tax Act which would see income received by religious, charitable, educational and other Section 21 companies being taxed.

Section 16 of the Income Tax Act provides that income of all ecclesiastical and charitable institutions of a public character are exempted from income tax and that this exemption applies irrespective of the source of such income.

When contacted for comment regarding the progress of the plan, finance ministry’s spokesperson Tonateni Shidhudhu told Namibian Sun that the ministry is continuing with this plan and it has conducted the necessary consultations with relevant stakeholders. The next step is the drafting and tabling of the bill in the August house.

“The bill will now be drafted and tabled in parliament for discussion and will be debated before the law is enacted,” Shidhudhu said.

“The Department of Inland Revenue held consultative meetings with relevant stakeholders to mainly clarify the proposed amendment in terms of inclusions and exclusions, discuss the requirements relating to compliance and most importantly to obtain crucial input that needs consideration.”

Shidhudhu explained that the institutions will continue to enjoy the tax haven as long as the income is not generated through commercial activities.

He added that the 32 percent corporate tax rate will apply to the institutions which are to be affected by the proposed amendment.

“The income received by the religious institutions will be exempted from income tax to the extent that such income was derived from donations, tithes, members’ contributions and similar sources,” Shidhudhu explained.

“The churches will be required to declare and pay tax on income received from commercial activities such as property rental, hospitality industry, transport industry and other types of income derived from activities of a commercial nature. It is anticipated that religious, educational and charitable institutions will be taxed at the current prevailing corporate tax rate of 32%.”

FAIRNESS

The amendment to Section 16 of the Income Tax Act to incorporate taxing the income of these means more revenue for the state.

However Shidhudhu explained that the proposed amendment by the ministry seeks more to provide fairness in the tax system and it should not be viewed as a government attempt to increase its streams of revenue.

“This is not merely to increase tax revenue but to enhance fairness in the tax system,” he said.

Prior to the consultations with the relevant stakeholders, the proposed amendment to Section 16 of the Income Tax received mixed feelings as church, NGOs and charity organisations bemoaned the announcement that was made without their consultation while some analyst thought it was a great move.

Similar News

 

Aaniilonga yuundjolowele 39 ya monika oCovid-19

22 hours ago | Local News

JEMIMA BEUKESOVENDUKAMomaandaha nEtiyali aaniilonga yahamano muundjolowele oya monika ombuto.Onkalo ndjoka oya lopotwa molopota yomasiku 31 gaJuli moka mwa hololwa kutya ompumbwe yonzo dhopauntu miitopolwa oyimwe...

A dhipagwa omolwa ococaine niitapa

22 hours ago | Local News

GOBABISNAMPAOkamati koomvula 14 okwa lopotwa ka dhipaga omumati gwoomvula 18 konima sho e mu tsu nombele pethimbo lyolugodhi moGobabis moshitopolwa shaMaheke mOlyomakaya lwopotundi...

ACC’s Noa reacts to flurry of changes

1 day - 05 August 2020 | Local News

JEMIMA BEUKES WINDHOEKAnti-corruption commission (ACC) director-general Paulus Noa says the law prohibits the...

Mupini youth refuse to pay ‘witchcraft’ slur fines

1 day - 05 August 2020 | Local News

Kenya Kambowe MUPINIEleven youth, who in June were fined two cows or N$4 000 each by the Mbunza Traditional Authority (MTA)...

Erongo travel permits still on the table

1 day - 05 August 2020 | Local News

Adolf Kaure SWAKOPMUNDA notice displayed in one of the Swakopmund police station’s windows was removed on Saturday after it created uproar amongst the town’s residents.On...

Kwa totwa ongundu yoIPC

2 days ago - 04 August 2020 | Local News

OGONE TLHAGE OVENDUKAOngundu ndjoka otayi kwatelwa komeho kwaangoka a li a kutha ombinga methigathano lyehogololo lyuupresidende, Omundohotola Panduleni Itula, ngoka a tidhwa mongundu...

Oyendji taya kanitha iilonga

2 days ago - 04 August 2020 | Local News

OGONE TLHAGEOVENDUKASha landula sho kwa pitithwa omiyalu dhina sha nondjele yokwaahena iilonga metata lyotango lyomvula, aanongononi oya holola kutya aantu oyendji miikondo ya yooloka ngaashi...

Ablution facilities needed

6 days ago - 31 July 2020 | Local News

LEANDREA LOUW WALVIS BAY A big consignment of food, tents and mattresses from the Office of the Prime Minister was officially handed...

Aavali ya lombwelwa ya kuthe ombinga melongo lyaanona yawo

1 week ago - 30 July 2020 | Local News

KENYA KAMBOWE RUNDU Omukomeho gwelongo moshitopolwa shaKavango East Fanuel Kapapero okwa popi kutya aavali inaya tegelela aanona yawo yuundulilwe koongundu tadhi landula...

Omukokele gwomOmusati a holoka mompangu omolwa ekwatonkonga

1 week ago - 30 July 2020 | Local News

KENYA KAMBOWE RUNDU Oshiningwanima shoka osha ningwa momasiku 30 gaJuni nuumvo momukunda Otsalindi mOtamanzi. Sackaria, okwa holoka komeho yomukwatheli omupanguli, Alma...

Latest News

Nacc prohibits proposed Chinese merger

22 hours ago | Business

Phillepus Uusiku The Namibia Competition Commission (NaCC) made a decision to prohibit the acquisition of Schwenk Namibia Pty Ltd by West China Cement Limited due...

River-crossing fugitive in custody

22 hours ago | Crime

OGONE TLHAGEWINDHOEKImmanuel David, a Namibian-born South African passport holder who entered the country illegally by crossing the Orange River in a canoe in June, has...

Harambee goal down the toilet

22 hours ago | Government

Jo-Maré Duddy WINDHOEK Of the 50 000 toilets in informal settlements in rural areas President Hage Geingob promised in his Harambee Prosperity Plan (HPP)...

Contraceptive shortage: 27 900 unintended...

22 hours ago | Health

JEMIMA BEUKESWINDHOEKA study predicts that up to 27 900 unintended pregnancies may occur in Namibia because of a shortage of contraceptives brought about by the...

RFA spend massive amounts

22 hours ago | Economics

The Road Fund Administration (RFA) has over the past five-years allocated N$ 177.2 million to the City of Windhoek towards road maintenance and traffic law...

Rid Namibian police of rogue...

22 hours ago | Opinion

Videos of Namibian police officers assaulting alleged illegal immigrants from Zambia are a continuation of many violations that have become common place within the national...

'Covid-19 used for hidden agendas'

22 hours ago | Labour

ELLANIE SMIT WINDHOEK The Trade Union Congress of Namibia (Tucna) yesterday accused government of purposefully using the Covid-19 pandemic to clandestinely and deliberately destroy parastatals,...

Otavi man commits suicide by...

22 hours ago | Crime

NAMPAOTJIWARONGOA 30-year-old man from Otavi committed suicide by allegedly drinking acid on Monday.Otjozondjupa police spokesperson, Inspector Maureen Mbeha, said yesterday the deceased has been identified...

N$5.5m for wildlife protection

22 hours ago | Environment

ELLANIE SMIT WINDHOEK The Game Product Trust Fund (GPTF) has become increasingly important in protecting wildlife due to a lack of funding from government. The...

Load More