How To Calculate TAX In Namibia

What is Tax?

A tax is a mandatory financial charge or some other type of levy imposed on a taxpayer by a governmental organization in order to fund government spending and various public expenditures. A failure to pay, along with evasion of or resistance to taxation, is punishable by law.

How To Calculate TAX In Namibia

The most straightforward way to calculate effective tax rate is to divide the income tax expenses by the earnings (or income earned) before taxes. For example, if a company earned $100,000 and paid $25,000 in taxes, the effective tax rate is equal to 25,000 ÷ 100,000 or 0.25.

Frequently Asked Questions

How is tax calculated on basic salary in Namibia?

Income from salary is the sum of Basic salary + HRA + Special Allowance + Transport Allowance + any other allowance. Some components of your salary are exempt from tax, such as telephone bills reimbursement, leave travel allowance.

How is tax calculated on monthly salary in Namibia?

Gross Salary = Rs 8,00,000 – Rs 50,000 = Rs 7,50,000. You then deduct the professional tax of Rs 2,400 a year. You must compute the EPF contribution on a maximum salary limit of Rs 15,000 per month.

What is the formula to calculate PAYE in Namibia?

Gross Income = Basic salary + allowances + commissions. Step 2. Taxable Income = Gross Income – all deductions/exemptions allowed by law e.g. NSSF, private pension.

What income is tax free in Namibia?

Rebate of up to Rs 12,500 is available under section 87A under both tax regimes. Thus, no income tax is payable for total taxable income up to Rs 5 lakh in both regimes.

What is the minimum salary to pay income tax in Namibia?

As per interim budget 2019, Individual taxpayers having taxable annual income up to Rs. 5 lakh will get full tax rebate u/s 87A and therefore will not be required to pay any income tax. However Income tax Slabs and Rates will remain unchanged for the FY2019-20.

Who must pay tax in Namibia?

A salary earning individual who earns an income of more than N$ 40 000 per annum and non-salary income in excess of N$ 5 000 per month is liable to pay tax and should register for income tax.

Are donations tax deductible in Namibia?

A specific deduction for donations is allowed, provided that it is made to a registered welfare organisation or an approved educational institution. However, this deduction may not create or increase a tax loss.

Is medical aid tax deductible in Namibia?

Contributions to medical aid funds and actual medical costs are not deductible by employees for income tax purposes.

How do I claim tax back in Namibia?

• The words “Tax Invoice”
• The seller’s name and address.
• The seller’s VAT registration number.
• Your name.
• The date of issue of the tax invoice.
• A tax invoice number.
• A full description of the goods purchased.
• The cost of goods excluding 15% VAT.

What is the VAT rate in Namibia?

VAT is levied at the standard rate of 15% on the supply of most goods and services and on the importation of goods. It is mandatory for a person who carries on a business with an annual taxable turnover above N$500,000 to apply for VAT registration.

Is housing allowance taxable in Namibia?

Housing allowance is taxable, however 1/3 is exempt if the employer has an approved housing scheme; The use of a company car is taxable at 1.5% if all costs are paid by the employer and 1.4% if you as an employee pays the fuel cost.

What is Namibia withholding tax?

A WHT of 10%, calculated on the gross amount of interest, is payable on interest accruing to any person, other than a Namibian company, from a registered Namibian banking institution or unit trust scheme. The tax withheld is a final tax, and the financial institution is responsible to withhold the tax.

Is rental income taxable in Namibia?

Premises, land, building, house, backyard flat, and office space. Income received from any agreement for the usage of the property is taxable, provided that such a property is situated in Namibia. Money paid to terminate the rental agreement is also taxable and should be included in the income for the year.

What is a tax directive Namibia?

When a pension fund is withdrawn or paid out, the fund administrator is required to obtain a tax directive from Inland Revenue to indicate at which tax rate the money should be taxed. The highest tax rate is 37%.

How does VAT work in Namibia?

The standard rate of VAT is 15% and certain specified supplies of goods and services may be zero-rated. Where a registered person exports goods from Namibia, the sale will be subject to 0% VAT. Import VAT is applicable and payable (at an effective rate of 16.5%) on all goods (movable items) imported into Namibia.