1998 SOUTHERN AFRICA ECONOMIC ... - National Treasury

N A M I B I A
In the meantime, n e gotiations with potential financiers are
u n d e r w ay in an attempt to satisfy the financing re q u i rements of
the pro j e c t . The targeted development will enhance the port ’s
c apacity and reposition it as an ‘emerging transit point’ on the
West Coast.
P r i v a t i s a t i o n
The process of privatising state assets in Namibia has been go i n g
on for the last three ye a r s .The Namibian authorities have opted
for a gradual pro c e s s ,meaning that initially there will be a hivingoff
of non-core functions with the intention of operating the
enterprises on a pure ly commercial basis. In essence, t h e
c o m m e rcialisation programme should entail the conversion of
w h o l ly - owned government enterprises into semi-ow n e d
p a r a s t a t a l s .The guidelines of the process are laid down in a draft
Cabinet memorandum.
I N V E S T M E N T C L I M A T E
I nvestment Incentives
To encourage investment into Namibia the government offe r s
tax and non-tax incentives to fo reign inve s t o r s ,with an emphasis
on export-oriented manu f a c t u r i n g :
C e rtificate of Status Investment
I nvestors may obtain a Certificate provided they fulfill cert a i n
criteria re g a rding the size and nature of the inve s t m e n t . T h e
holder of a Certificate is entitled to, inter alia, buy fo re i g n
c u rrency to service fo reign loans, to transfer net pro f i t s ,
d i v i d e n d s , p roceeds of sales and remittances and to re t a i n
c u rrency gained from export s . T h ey are also granted exe m p t i o n
f rom restrictions re g a rding categories of business re s e rved fo r
Namibian re s i d e n t s .
Special Incentives for Manufacturing Enterprises:
The fo l l owing incentives we re introduced in 1993 and ap p ly
e q u a l ly to local and fo reign manufacturing companies:
* 50 percent tax abatement for five years - phased out over 10
ye a r s ;
* N ew investment relocation package - further negotiated tax
r a t e s ;
* Accelerated depreciation on buildings - 10 ye a r s ;
* E x p o rt e r ’s deduction (promotion costs) - 125 percent to 175
p e rcent tax deductible;
* Training cost deduction - 125 percent tax deductible;
* D i rect production wages deduction - 125 percent tax
d e d u c t i b l e ;
* Concessional loans for industrial studies 50 percent of real
c o s t ;a n d
* E x p o rt e r ’s grants/loans - 50 percent of ap p roved pro m o t i o n a l
e x p e n s e s .
E x p o rt Incentives
To market local manu f a c t u re r s ,the Namibian government has
e m b a r ked on a series of programmes that will ultimately boost
the export industry. Chief among these programmes has been
the introduction of export processing zones (EPZ). A r a n d i s
near Swako p mund has been a special incentives zone since
1 9 9 1 .A l s o,in 1995 the government announced an EPZ in Wa l v i s
B ay. T h e re are plans of establishing financing institutions allow i n g
for guaranteed conversion of fo reign exchange. Activities that
qualify for EPZ include all export - m a nufacturing activities, v a l u e
a dded processing in agro - i n d u s t ry and mineral beneficiation,
storage and ware h o u s i n g , b reak-bulk activities and business
s e rv i c e s . I n c e n t i ves offe red in the EPZ include:
* E xemption from corporate income tax, general sales tax,
a dditional sales duty, stamp duties, t r a n s fer duties and import
duties (for exports out of SAC U ) ;
* Guaranteed currency conversion (offshore banking legislation
to fo l l ow ) ;
* Liberal labour and customs re g u l a t i o n s ;a n d
* Conditional reimbursement of up to 75 percent of EPZ
personnel training costs.
In addition to the incentives offe red in the EPZs, a provision was
i n t roduced in 1994/95, which offers an 80 percent exe m p t i o n
f rom taxation on profits accruing to exports of manu f a c t u re d
goods (except fish and meat pro d u c t s ) . Tax incentives fo r
e x p o rt promotion activities are also av a i l a b l e.
As a Lomé Convention signatory Namibia enjoys pre fe re n t i a l
access to the European Union on a wide range of pro d u c t s .T h e
c o u n t ry is also granted duty-free access to the US and other
major markets through the GSP. Namibia is a member of the
regional organisations SADC and COMESA.
TA X AT I O N
C o r p o r a t e :G e n e r a l :
Diamond mining companies:
35 perc e n t
55 percent
Oil and gas extraction companies: 42 percent plus additional
p rofits tax
Other mining companies:
Individual income tax:
25 – 55 perc e n t
depending on pro f i t a b i l i t y
35 percent maximu m
marginal rate.
N o n - resident shareholders tax: 10 perc e n t .
Dividends from the NSE-listed companies payable to Namibian
residents are tax-fre e.
Double taxation agreements have been concluded with South
Africa and the UK. N e gotiations are underway with a nu m b e r
of additional countries.
Institutions Invo l ved in Investment Pro m o t i o n
The Investment Centre is located within the Ministry of Tr a d e
and Industry and is the officially recognised inve s t m e n t
p romotion and facilitation office. The centre was founded by the
Fo reign Investment Act of 1990, focuses on promotion of
domestic investment and provides a service to all investors fro m
e n q u i ry to operational stage. The Centre offers general
i n formation packages and tailor-made advice re g a rd i n g
i nvestment opport u n i t i e s ,i n c e n t i ves and pro c e d u res and also
p rovides advice to government on investment tre n d s ,policy and
the need for new strategies or strategies.
The Offshore Development Company (ODC) has been cre a t e d
for the sole purpose of monitoring, regulating and pro m o t i n g
N a m i b i a ’s EPZ re g i m e. This is a private company run by the EPZ
s e c retariat whose main task is to provide easy, speedy and
efficient processing of investors’ ap p l i c a t i o n s . The ODC is
c u rre n t ly in the process of establishing an Official Financial
S e rvice Industry, which will be used as financing vehicle fo r
i nvestors settling in the EPZs.
The Namibian Development Corporation is a parastatal
p roviding loans and equity, local and fo reign inve s t m e n t ,
s t i mulation of small and informal economic activity and the
p romotion of employ m e n t . The Corporation is also invo l ved in
the implementation of development schemes. The Namibian
National Chamber of Commerce and Industry, established in
1 9 9 0 ,re p resents the interests of the business commu n i t y.
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