Namibia payroll and tax overview.

Namibia is situated on continental Africa’s western coast, bordered to the north by Angola and Zambia and to the east and south by Botswana and South Africa. After gaining independence from South Africa in 1990, Namibia emerged from a period of political turmoil to step onto the global stage, becoming a member of the United Nations, the Southern African Development Community, the African Union, and the Commonwealth of Nations. Due to their shared history and geographic proximity, Namibia’s economic profile is closely tied to South Africa with mining, agriculture, manufacturing, and tourism all playing a significant part in GDP. Considered one of the world’s most promising emerging economies, Namibia has introduced reforms designed to reduce red tape, tackle corruption, and streamline the business set-up process. The result of those efforts have been positive: Namibia has experienced an average economic growth rate of 4.48% since 1990 and reached an estimated GDP of $14.36 billion in 2019. Namibia’s economic reforms have also attracted investment, with international organisations moving employees and operations to the country and turning the capital city, Windhoek into a thriving regional business hub. In 2019, the World Bank ranked Namibia 104 on its Ease of Doing Business Survey.

Why Invest in Namibia?

Businesses targeting Namibia will find a number of reasons to invest, including:

• Market opportunities: Namibia offers a spectrum of business opportunities for prospective investors, with an abundance of natural resources, including uranium, copper, and gold, and growing agricultural, tourism, manufacturing, and service sectors.
• Investment incentives: The Namibian government has put a range of investment incentives in place to attract both local and international business to the country. These include the Foreign Investment Act which promotes the equal treatment of foreign investors, and specific incentives - for manufacturing and exports - for businesses based within Namibia.
• Gateway to Africa: Namibia occupies a strategic location on Africa’s western coast, representing a continental gateway to a market of around 277 million potential customers. As a member of the SADC, Namibia enjoys preferential trade treatment to the bloc’s 14 other member states.
• Political & economic stability: Namibia provides a solid foundation for ongoing business interests, with a stable and democratic government, low levels of corruption, a free press, and robust opposition parties. Namibia’s government and financial institutions are amongst the most developed and sophisticated in the region.
• Labour & social climate: Businesses in Namibia draw from a young and educated labour force, while the government remains committed to transforming the country into a competitive, knowledge-based, eco-friendly nation - with sustainable growth and a high quality of life.

Foreign Direct Investment in Namibia

Namibia has a highly competitive incentive and fiscal regime which has contributed to its attractiveness to foreign investors, and has given the country one of the lowest credit risk ratings in Africa. Since the late 20th century, Namibia’s government has been working to increase levels of foreign investment, by offering a range of specific initiatives, including the Foreign Investment Act which places foreign business interests on an equal footing with domestic businesses, and incentives for businesses manufacturing in, and exporting from, Namibia.

Company Registrations and Incorporation of a Legal Entity in Namibia

For companies looking to process payroll in Namibia, once the legally entity has been set up, the following registrations to the tax and/or social security authorities are required:

• Registration for Pay-As-You-Earn (PAYE) Tax with the Receiver of Revenue - estimated timeline for completion: 4 days;
• Registration of the employees with the Social Security Commission - estimated timeline for completion: 21 days;
• Registration of the employees with the Workmen’s Compensation Commission - estimated timeline for completion: 20 days;

The key legislative authorities in this country are:

Deputy Commissioner of Inland Revenue and Staff

Special Investigations

Inland Revenue

Private Bag 13185

Windhoek

Namibia

Commissioner Revenue Management - Windhoek (Head Office)

Social Security Commission

Kloppers Street

Khomasdal

Private Bag 13323

Windhoek

Tel: 061 280 7999

Fax: 061 280 7999

Email: corporate@ssc.org.na

Business Banking in Namibia

It is not mandatory to make payments to employees or the authorities from an in-country bank account. Banks are open Monday to Friday 09:00 am to 15:30 and between 08:00 to 12:00 on Saturdays.

What Are the Working Days and Working Hours in Namibia?

There is a 5 day working week in Namibia.

The work week for full-time employees is generally limited to no more than five days (eight hours per day) and a maximum number of 40 hours per week, with 2 consecutive days of rest, usually Saturday and Sunday. According to the law, the maximum legal length working time may not exceed 48 hours per week, including the overtime.

Basic Facts about Namibia

General Information

Namibia is one of southern Africa’s largest nations by population and geographic size. With a western coast on the shores of the Atlantic Ocean, Namibia represents a gateway to continental Africa - and shares land borders with Zambia, Angola, Botswana, and South Africa. The territory which became Namibia has been inhabited since prehistory by the San Damara, Nama, Bantu, and Ovambo civilisations. A protectorate of the German Empire from the late 19th century, Namibia was taken over by South Africa in 1915. After obtaining independence in 1990, Namibia joined the global community, and became part of numerous international political unions and trade organisations - and set progressive development goals. Namibia experiences a sub-tropical climate, with warm, dry conditions across its predominantly desert and rocky landscapes. The country's indigenous ecosystems include a wide variety of flora and fauna which contribute to its appeal as an international tourism destination.

Full Name: Republic of Namibia

Population: 2.534 million (World Bank, 2017)

Capital: Windhoek

Major Languages: English

Major Religion: Christian

Monetary Unit: Namibian Dollar

Main Exports: Agriculture, herding, tourism and the mining industry including mining for gem diamonds, uranium, gold, silver, and base metals

Internet Domain: .na

International Dialing code: +264

The Namibia tax year runs from 1st March to 28th February.

Income Tax in Namibia

A sliding scale is used to determine the tax rates applicable to individuals. For all years of assessment effective 1st March 2009, the minimum rate is 0% and the maximum rate applied is 37%.

Any change in the tax rates is announced in the yearly budget speech once the draft bill is promulgated for comments and approved by parliament. The Namibian tax year commences on 1 March to the last day of February that subsequent year.

The Namibian tax authority is known as the Namibian Inland Revenue Authority (“NIRA”).

Social Security in Namibia

There are social security taxes paid to the Commissioner of Social Security.

Social security is payable on a 50:50 contributions from employers and employees.

The contributions are calculated at 0.9% of earnings, with a minimum monthly contribution of N$2.70 and a maximum monthly contribution of N$81.00 by each.

Payments must be made within 20 days after the month-end.

Reporting Tax in Namibia

The payroll provider doesn’t need to be licensed to make any tax and/or social security filing on behalf of the client.

Monthly

P.A.Y.E. Monthly return: Due to be submitted by employer within 20 days after the month-end (month during which PAYE was deducted).

Yearly

Documents to be submitted are –

• 6-0/0014C/1 Return of Income
• 6-0/0137 Tax Assessment

Tax returns should be submitted at the regional offices’ customer services or at the magistrate court.

Salary earning individuals are required to submit their tax return four months after the end of the tax year.

New Employees 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.

Registration is done at the IRD by completing a registration form and then the taxpayer will be given an Income Tax Number.

To register for Pay-As-You-Earn (PAYE) Tax with the Receiver of Revenue takes up to four days.

Leavers in Namibia

Generally, the last payment to the employee is made on the final day, although there is no specification set out.

There is no requirement of informing any social security authorities about the leaving employee.

Payroll in Namibia involves an obligation for employers to withhold employees’ tax and social security contributions, on a monthly basis, via the PAYE system. Taxable income in Namibia includes most types of remuneration, along with contractual gratuities and allowances for travel or entertainment. Income tax in Namibia is progressive - and paid at the following rate:

Up to N$ 50,000 - 0%

N$50,001 to 100,000 - 18%

N$100,001 to 300,000 - 25%

N$300,001 to 500,000 - 28%

N$500,001 to 800,000 - 30%

N$800,001 to 1,500,000 - 32%

Over N$1,500,000 - 37%

Social security payments in Namibia are drawn from employers and employees, who both contribute at a rate of 0.9%. Namibia payroll processing involves a degree of regulatory complexity - while it may be possible to handle payroll administration in-house, foreign businesses may wish to engage an outsource organisation to bring in a degree of territorial compliance expertise.

Payments to Namibia’s Inland Revenue must be submitted by the 20th of each month. Payroll reports should be kept for a minimum of seven years.