Chamwe Kaira
Major tax rate increases are unlikely in the 2026/27 budget, as broad hikes could weaken economic recovery in a low-growth environment.
Standard Bank Namibia head of tax Adeline Beukes said the government is unlikely to raise tax rates sharply when finance minister Ericah Shafudah tables the budget in Parliament today.
“In recent years, we have seen tax relief measures aimed at supporting consumers, including adjustments to personal income tax brackets announced by former finance minister Ipumbu Shiimi, as well as pension-related tax amendments that are still to be promulgated. Corporate tax has also been gradually reduced from 32% to 30% through a staggered approach, with the rate currently at 30% and another 1% reduction expected in the corporate tax rate over the Medium-Term Expenditure Framework (MTEF).”
Beukes said the recently introduced 10% dividend tax on local shareholders widens the tax base, though its impact will depend on how much dividend income flows to Namibians.
“Given that much of the economy remains driven by foreign investment in mining, agriculture and finance, and with a relatively small pool of local dividend earners, the short-term revenue boost may be modest. There may be reference to the proposed SME tax, which is intended to boost tax revenue generated by SMEs by streamlining and simplifying tax administration for small and medium-sized enterprises.”
She said the focus is more likely to remain on improving tax administration rather than changing rates.
“We may also see greater policy clarity around oil and gas taxation, aligned with the strategic priorities of the National Planning Commission under NDP6. Given the ongoing activity in the petroleum space, the market seeks clarification of the petroleum fiscal regime, but it is uncertain whether this would be forthcoming,” Beukes said.
She added that targeted relief for mining and renewable energy could feature in the budget, from both income tax and VAT perspectives, as the government seeks to attract investment in those sectors.
“There has been a drive to identify structured vehicles which provide greater benefits than the legal form should attract. There may be tax changes that consider these. Smaller adjustments to sin taxes or levies remain possible, but sweeping reforms are unlikely.”
Capricorn Group chief economist Floris Bergh said several tax proposals already in the public domain still need final decisions.
“For instance, the 10% withholding tax on dividends, paired with a lowering of the corporate tax rate to 28% and the tax regime of long-term insurance companies, to name but a few. The Ministry of Finance is crafting a medium-term revenue strategy that should shed light on future proposed changes,” said Bergh.
As the minister presents the budget, analysts say the direction of tax policy will likely centre on widening the base, strengthening compliance and providing clarity on strategic sectors, rather than imposing major new tax burdens.
