Future of taxation in Namibia

As Namibia enters a new era of economic opportunity, from green hydrogen to digital transformation, the need for a modern, responsive and integrated tax system is becoming increasingly urgent. The latest edition of the Business Breakfast Club, hosted under the ongoing theme “The Future – Envisioning Tomorrow”, brought together leading voices from across the financial, legal, and business sectors to explore how tax and technology can work hand in hand to support national development and drive investment.

Held once again at the Stellenbosch Wine Bar and Bistro, the conversation unpacked everything from risk-based audits to open APIs and the potential of artificial intelligence in tax administration. While the topics were technical, the impact is deeply practical — for businesses of all sizes, for revenue collection, and for how Namibia positions itself on the global investment map.

One of the standout messages from the morning was the need for a smarter, more data-driven approach to compliance and enforcement. Drawing comparisons to models used in the Netherlands and elsewhere, panellists highlighted how advanced analytics could help tax authorities audit based on actual risk rather than outdated assumptions. Currently, any company claiming a refund is likely to be audited, regardless of their reputation or compliance history. In the future, with more data and better algorithms, that could change. Large, reputable institutions such as banks, which have strong internal controls and significant reputational risks, should not face the same level of scrutiny as highrisk or non-compliant entities. This shift toward targeted oversight is not only more efficient but also improves trust in the system.

Technology was another recurring theme. Namibia’s existing tools, like the e-tariff portal for import duties, were praised for their utility and accessibility. However, attendees noted that the country has not yet embraced full digital integration. The use of APIs, application programming interfaces that allow business systems to connect directly with the revenue authority, was discussed as a major opportunity for streamlining tax compliance. In neighbouring South Africa, such integration already enables users to make payments, submit filings, and verify data with minimal friction. In Namibia, companies still rely on EFTs with reference numbers, manual uploads of proof of payment, and other steps that could be easily automated. Unlocking these efficiencies would benefit both the revenue authority and businesses, reducing errors, delays and administrative burdens.

Incentives and exemptions were also hotly debated. While green hydrogen has received significant tax breaks and import duty concessions, other industries such as mining, upstream oil and gas, and manufacturing are still waiting. The panel agreed that Namibia’s tax policy should not favour one sector to the exclusion of others, especially when those sectors are capital-intensive and job-creating. The upcoming Special Economic Zone (SEZ) legislation, expected before the end of 2025, could present a chance to level the playing field. The SEZ framework is anticipated to replace the phased-out Export Processing Zone (EPZ) regime and revive many of the manufacturing incentives that once attracted foreign direct investment into the country. There was consensus that in order for these zones to be effective, they must offer practical relief such as upfront import duty exemptions to ease the cash flow burden on companies investing hundreds of millions in equipment and infrastructure.

The conversation also touched on the prospect of introducing a capital gains tax in Namibia. Drawing from South Africa’s two-decade experience, speakers argued that the revenue potential may not justify the complexity. Capital gains tax tends to generate relatively low collections, yet requires significant administrative resources and legislative changes, including a shift to residency-based taxation. Such a move could deter investment and complicate compliance for businesses and individuals alike. In a country where simplicity is one of the key selling points of the tax system, this could be counterproductive.

Environmental taxes also came under scrutiny. Several business leaders expressed concern that these levies, introduced to influence behaviour or drive sustainability, often disappear into the general government budget with little accountability. Examples from conservation and manufacturing highlighted how revenue from park fees or plastic levies is not always reinvested in the intended causes. There was strong support for ring-fencing certain taxes, particularly those meant to address social or environmental issues, to ensure the funds are used as promised.

A well-designed tax system that is fair, simple, and digitally integrated can unlock that potential by encouraging investment, supporting innovation, and enabling sustainable growth.

Another important dimension of the discussion was support for small and medium enterprises (SMEs). Despite being a national priority under the latest development plans, SMEs in Namibia currently face the same tax rates and administrative obligations as large corporations. There is, however, a draft proposal in circulation that would lower the tax rate to 20 percent for businesses with turnover under 10 million Namibian dollars. While welcome, experts warned that it may not go far enough. More needs to be done to simplify the tax experience itself. Proposals such as a turnover tax, a flat rate on revenue that replaces multiple tax obligations, were mentioned as potential solutions that would ease compliance for startups and small business owners. The burden of red tape, especially during the early stages of a business, remains a significant barrier to growth.

The conversation closed on a high note, looking at how Namibia could position itself as a hub for innovation, fintech, and digital entrepreneurship in the region. Panellists cited examples from Kenya and Rwanda, countries that have successfully positioned themselves as pilot markets for technology firms in SubSaharan Africa. With stable governance, a friendly investment climate, and tools like the Digital Nomad Visa already in place, Namibia has the foundations. But to compete for talent and capital, the country must continue to modernise its tax system, digital infrastructure and regulatory frameworks.

Ultimately, as one speaker put it, natural resources like oil and green hydrogen are welcome, but human capital is Namibia’s greatest asset. A well-designed tax system that is fair, simple, and digitally integrated can unlock that potential by encouraging investment, supporting innovation, and enabling sustainable growth.

The next Business Breakfast Club will take place in November and will focus on Corporate Governance in the modern business landscape. To learn more or join the conversation, visit www.bbcnam.com

David Penda