No tax shocks for budget
Experts are of the view that the finance ministry will opt to support economic growth and therefore no real tax shockers are expected in the budget.
The finance minister Calle Schlettwein will possibly only make minor adjustments and changes to the tax regulations when he tables the budget at the beginning of March.
Experts are of the view that in spite of the recession government finds itself in, Namibians will not carry the burden of extra tax.
“We do not expect an increase in taxation, whether it be personal or company tax or even VAT. We believe that the finance ministry understands the importance of supporting economic growth and that increases in taxes will have the opposite effect,” said Stefan Hugo, tax director at PwC Namibia.
Cameron Kotzé, managing partner at EY Namibia, agrees. “I believe that the focus will be placed on the collection of tax monies. I further also believe that more efficient implementation of the existing legislation will enhance revenue collection,” he added. Kotzé said the rebates announced recently are a good example of this.
According to Kotzé, transfer pricing, internationally viewed as an easy revenue source, could be another focus area along with improved monitoring to ensure that all taxpayers declare all their taxable income.
“A good example of this is profits from the sale of assets or investments on which currently no taxes are paid but which are taxable according to the income tax regulations,” he said.
Hugo is of the view that the finance ministry is already focused on adherence to the existing regulations and these types of projects would increase revenues without making any changes to the current laws.
However, small amendments are possible, Hugo said. This could include changes to the list of tax-free items which could become taxable.
He added that communications regarding changes in the administrative procedures regarding VAT on imports and said that he expects further adjustments to make “VAT-administration more efficient”.
In his view, the ministry will focus on two issues in the coming year: The creation of a revenue collections agency and the implementation of an e-filing system for electronic tax return filing.
The bill for the collections agency is in its final review Hugo added.
With regards electronic filing, the system will be rolled at in a test phase to large taxpayers and only in the second half of the year. If the system performs, the public will be allowed access.
He also added that proposals currently under review by the ministry include changes to regulations which allow trusts not to pay taxes as well as capital gains tax and presumptive tax.
JO-MARE DUDDY
Experts are of the view that in spite of the recession government finds itself in, Namibians will not carry the burden of extra tax.
“We do not expect an increase in taxation, whether it be personal or company tax or even VAT. We believe that the finance ministry understands the importance of supporting economic growth and that increases in taxes will have the opposite effect,” said Stefan Hugo, tax director at PwC Namibia.
Cameron Kotzé, managing partner at EY Namibia, agrees. “I believe that the focus will be placed on the collection of tax monies. I further also believe that more efficient implementation of the existing legislation will enhance revenue collection,” he added. Kotzé said the rebates announced recently are a good example of this.
According to Kotzé, transfer pricing, internationally viewed as an easy revenue source, could be another focus area along with improved monitoring to ensure that all taxpayers declare all their taxable income.
“A good example of this is profits from the sale of assets or investments on which currently no taxes are paid but which are taxable according to the income tax regulations,” he said.
Hugo is of the view that the finance ministry is already focused on adherence to the existing regulations and these types of projects would increase revenues without making any changes to the current laws.
However, small amendments are possible, Hugo said. This could include changes to the list of tax-free items which could become taxable.
He added that communications regarding changes in the administrative procedures regarding VAT on imports and said that he expects further adjustments to make “VAT-administration more efficient”.
In his view, the ministry will focus on two issues in the coming year: The creation of a revenue collections agency and the implementation of an e-filing system for electronic tax return filing.
The bill for the collections agency is in its final review Hugo added.
With regards electronic filing, the system will be rolled at in a test phase to large taxpayers and only in the second half of the year. If the system performs, the public will be allowed access.
He also added that proposals currently under review by the ministry include changes to regulations which allow trusts not to pay taxes as well as capital gains tax and presumptive tax.
JO-MARE DUDDY
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