17/09/2024
The Namibian Minister of Finance and Public Enterprises, Iipumbu Shiimi, clarified the process for PAYE tax refunds, following the announcement of tax relief measures earlier this year. Namibians earning
The Namibian Minister of Finance, Iipumbu Shiimi, recently provided important details about the new Pay As You Earn (PAYE) tax relief. Earlier this year, the government introduced changes to help reduce the tax burden on employees, particularly those earning less than N$100,000 annually. Here's what you need to know:
1. Tax Exemption for Low Earners:
Starting from 1 March 2024, anyone earning less than N$100,000 per year will no longer have to pay PAYE. This is an increase from the previous threshold of N$50,000.
2. Tax Relief for Higher Earners:
Those who earn more than N$100,000 will also benefit. The first N$100,000 of their income will be tax-free, meaning they will pay less tax overall.
3. Refunds for Overpaid Taxes:
Since the law became effective on 1 March 2024, some employees have already had too much tax deducted from their salaries. Employers are now required to refund these over-deducted taxes. Instead of waiting until next year, refunds can start from October 2024.
4. How Employers Will Manage Refunds:
Employers won't need to come up with extra money to give these refunds. Instead of sending the full amount of PAYE to the tax authorities (NAMRA), they will subtract the refund amount and pay that back to employees.
For example, if an employee was supposed to pay N$100 in tax but was over-deducted by N$30, the employer will pay N$30 back to the employee and send the remaining N$70 to NAMRA.
5. Flexibility for Employers:
To avoid cash flow problems for businesses, employers can spread out the refunds if needed. They have until February 2025 to complete the process, giving them the flexibility to refund monthly or in a way that best suits their financial situation.
By offering this tax relief, the government is aiming to provide quick financial support to workers while ensuring that businesses can manage the process smoothly without additional financial strain.