23 Feb 2014 10:40am
WINDHOEK, 21 FEB (NAMPA) The Ministry of Finance is investigating the introduction of a presumptive tax system for small businesses.
Finance Minister Saara Kuugongelwa-Amadhila confirmed this on Friday during a budget review meeting hosted by Deloitte Namibia in the capital.
Presumptive tax refers to a system whereby a taxpayers income is assumed, and the taxpayer is then taxed accordingly.
The minister said the benefits of such a system are that it is simple, reduces tax administration costs for the taxpayer and is a stable source of income for Government.
Some challenges could, however, include legal constraints and a perception of unfairness as the expenses, tax losses and individual circumstances of the taxpayer are ignored.
Kuugongelwa-Amadhila also confirmed an increase in the Value-added Tax (VAT) registration threshold.
The threshold is currently N.dollars 200 000, and has not been increased since the introduction of VAT in 2000.
The proposed increase - to N.dollars 500 000 - will result in smaller enterprises not being required to register, therefore reducing compliance to administration and costs both from a taxpayer and fiscus perspective, she explained.
The Finance minister also indicated that they are investigating the introduction of capital gains tax, which is a tax imposed on the sale of investments or capital assets.
She, however, did not provide details regarding the scope, rate or when the tax is expected to be implemented.
Kuugongelwa-Amadhila tabled the N.dollars 60,28 billion budget in the National Assembly on Wednesday.