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Latest developments from Namibia

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The Namibia representative for the SA Institute of Business Accountants, Lehana Nel, reports on some of the latest developments from that country.

Extension granted for Online Submission of Employees Tax (PAYE) returns via the ITAS portal

Previously, employers were required to prepare and submit their PAYE returns online through the Integrated Tax Administration System (ITAS) by latest, 20th of September 2019.

Background:

In the past, the required format supplied by ITAS (Integrated Tax Administration System) for the monthly PAYE return forms due on the 20th of each month, was not utilized by the taxpayers as ought to be. After consultation with various stakeholders including payroll software systems, the system for submitting PAYE forms has been amended.

Outcome:

The Ministry of Finance has granted further extension for employers to submit their monthly PAYE returns manually up until 20 February 2020. No manual returns will be accepted after the 20th of February 2020. It will allow each employer sufficient time to prepare for online filing.

Please note that this does not include:

Employers should note that the extension does not apply to the monthly Employees Tax payments due to IRD (Inland Revenue Department)

Request from IRD:

  • Employers who wish to submit PAYE returns manually, are obliged to update all manual return submissions through uploading electronic versions on the ITAS portal by 20 March 2020;
  • Employers are encouraged to perform online PAYE return submissions as soon as possible.

Find attached official notice

  1. Introduction of changes to existing environmental duties/levies in Namibia

The Honourable Minister of Finance published a Notice in the Government Gazette dated 2 August 2019 which will provide for the following amendments to Schedule I to the Customs and Excise Act, Act No. 20 of 1998 (“the Act”).

Fuel levies increase

Increase of the fuel levy on the following petroleum oils and other products of bituminous minerals:

The new fuel rates above are effective from the date of publication in the Government Gazette, i.e. 2 August 2019 (Government Notice No 225).

DescriptionNew rate of fuel levy
Petrol90c/li
Diesel90c/li
Illuminating kerosene (paraffin)120c/li
Specified aliphatic hydrocarbon solvents120c/li
Biodiesel as defined90c/li
Other biodiesel120c/li

Environmental levies – current and envisaged additions

Levy on carbon emission by vehicles imported or manufactured in Namibia:

Sections B and C of Part 3 of Schedule I to the Act, which deals with environmental levies on carbon emission by vehicles and tyres, respectively, will replace the current Sections B and C with some amendments. Currently, the tax is known as “environmental duty” and will be known as “environmental levy”. It is not clear whether the change in name is deliberate or inadvertent but could lead to some con-fusion and unnecessary tax accounting system changes by importers or manufactures.

The rates on carbon emissions by most road vehicles largely remain the same in terms of Section B, although some increases are introduced as per the Table in 6. below. It is important to note that the classification of vehicles can be very technical and considering that the published rates and description in the above Notice can be confusing, it is suggested that the assistance from experienced customs advisors be obtained to ensure correct compliance with customs laws in this regard.

Environmental levies – current and envisaged additions

For the sake of completeness, the new rates on carbon emissions as published in Section B of the Gazette are summarized below:

Description of vehicle Environmental levy rate (per COemission in g/km)
Single axle tractor N$45 for emissions above 120g/km
Road tractors for semi-trailers N$45 for emissions above 140g/km
Other road tractors N$45 for emissions above 140g/km
New buses fitted with extras (toilet, AC, etc.) and driven by diesel/petrol engines N$40 for emissions above 120g/km (petrol engines) N$45 for emissions above 140 g/km for diesel engines
Other buses not exceeding 2000kg, or vehicles for transport of more than 14 passengers (including the driver) propelled by diesel/petrol engines Other buses exceeding 2000 kg
New buses extras (toilet, AC, etc.) and propelled by diesel/petrol and electric motors (hybrid propulsion) N$40 for emissions above 140 g/km for petrol engines
N$45 for emissions above 140 g/km for diesel engines
Other buses not exceeding 2000kg, or vehicles for transport of more than 14 passengers (including the driver) propelled by diesel/petrol engines
Other buses
Motor vehicles for transport of persons N$40 for emissions above 120 g/km for petrol engines
N$45 for emissions above 140 g/km for diesel engines
Motor vehicles for transport of goods N$40 for emissions above 120 g/km for petrol engines
N$45 for emissions above 140 g/km for diesel engines
Formula to deemed CO2 emission if no manufacturer’s certificate available 120 + (0.05* engine capacity in cc) where applicable (mostly for petrol engines); 140 + (0.05* engine capacity in cc), where applicable (mostly for diesel engines)
  1. Import VAT exemption on certain animal feed products imported by farmers in Namibia

Legislative background

The Namibia Agricultural Union (NAU) approached the Department of Inland Revenue to exempt certain animal feed products by Namibian farmers from import VAT. Inland Revenue replied that goods imported under rebate item 412.11, paragraph 2(g)(i) of Schedule V to the Value Added Tax Act (Act No. 10 of 2000), as amended (the VAT Act”) may qualify for exemption from VAT on importation. The mentioned rebate item reads: “Goods imported (1) for the relief of distress of persons in cases of famine or other natural disaster.” Inland Revenue confirmed that the exemption would be applied in view of the prevailing drought conditions and consequent state of emergency declared by His Excellency, Dr Hage Geingob earlier. The exemption will be administered by the Customs and Excise department which is responsible for the collection and recording of import VAT on behalf of Inland Revenue on the collection of import VAT in terms of section 14(5) and (6) of the VAT Act.

Who qualifies for the exemption?

Customs confirmed that the import VAT exemption applies to individual farmers (communal and commercial farmers) in all regions of Namibia importing animal feed products directly for own use and not for resale. It is important to note that the exemption will only apply on importation and not when buying animal feed products in Namibia from registered suppliers. In the last-mentioned instance, VAT will still be payable at the standard rate of 15%.

Which products may be imported exempt from VAT?

Customs confirmed that the following products fall under the exemption:

(a) Roughage: lucerne, grass teff and other wheat straw, oats straw/hay, maize hay, sorghum hay and silage;

(b) Energy and protein concentrates: Cotton oil cake, sunflower oil cake, maize chop, wheat bran, soya oil cake, full fat soya, maize meal, whole maize kernels, molasses, wheat, barley, oats, sunflower hulls, whole cotton seed and maize bran.

Where may application be made for exemption from import VAT on the above products?

Application should be made at Customs Head Office, Division: Trade Facilitation, Fiscus Building, John Meinert Street or in the alternative, at the Customs point of entry office. Once approved, the exemptions must be forwarded to the AsycudaWorld Functional Team for capture on the Customs system prior to importation to ensure exemption from import VAT.

Which documentation should support the application for exemption from VAT on importation of animal feed products?

Commercial and communal farmers should provide proof of registration at the Meat Board of Namibia as a farmer or any other legally recognized registration. An application letter should be submitted, supported by (a) the invoice from the foreign supplier of the animal feed and (b) copy of ID or passport of the applicant and (c) import permits, where applicable.

Other relevant information

Customs indicated that the granting of the exemption takes about 3 -5 working days. It is therefore suggested that the application be submitted at least 7 days before the consignment of animal feed products will arrive at the Namibian border.

Note that the exemption will not be granted retrospectively. Should a truck with the animal feed products arrive at the border post without the exemption granted and recorded on the Customs system and import VAT is paid in order to proceed with urgent delivery to the Namibian farmer, a refund of import VAT will not be made if an exemption is applied for after the delivery.

It does not matter where the animal feed products are imported. It may be from another SACU country (e.g. Botswana or South Africa), from another SADC country or even from a non-SACU or SADC country.

The exemption only applies to import VAT. Customs duties (where applicable) remain payable to Customs at the point of entry.