was not entitled to claim an input tax credit on such goods. It is submitted that this can only apply in respect of secondhand goods acquired by a nonregistered person after the introduction of VAT in Namibia (as VAT must have been charged on the original acquisition) or in respect of secondhand goods acquired from a person rendering exempt supplies and who acquired such goods after the introduction of VAT and utilised such goods acquired solely in the making of exempt supplies.
Prior to 1 October 2004, an input tax claim was allowed on the acquisition of any secondhand goods from a nonregistered person, irrespective of whether or not that nonregistered person in fact paid VAT on the acquisition of such goods.
The VAT paid on passenger vehicles and entertainment services acquired by tour operators qualify for deduction of input tax. Services by a tour operator to nonresidents are subject to VAT.
Transfer of a business
The sale of a business as a going concern is a zero-rated supply for VAT purposes. However, in order to obtain the zero-rating, notification to Inland Revenue is required within 21 days of the date of the sale. It is thus not possible to obtain a zero-rating for a backdated sales transaction.
A supply of goods or services in pursuance of any guarantee given in respect of new goods is zero-rated for VAT purposes.
Agents and auctioneers
Where an agent makes a supply of goods or services on behalf of a principal, the supply is deemed to
be made by the principal and not the agent, provided that where the agent is a registered person, the agent may issue a tax invoice, tax credit or tax debit note as if the agent has made a taxable supply. In such cases, the principal is not allowed not to issue a tax invoice, tax credit or tax debit note for the same taxable supply.
Where any goods are imported into Namibia by an agent on behalf of a principal, the importation is deemed to be made by the principal and not the agent, provided that the Customs declaration may be held by the agent.
Despite the above provision, where a registered Namibian agent imports goods on behalf of a nonresident and nonregistered principal, the importation is deemed to have been made by the agent and not the principal, provided the agent obtains and retains acceptable documentary proof that he or she paid the import VAT and that the agent and principal agreed in writing that the import VAT paid by the agent will not be reimbursed by the principal.
An auctioneer and principal may agree that auction sales will be deemed to have been made by the auctioneer in the course of the auctioneer’s taxable activity and will be subject to VAT.
Other indirect taxes
Customs and excise duties
Customs and excise duties are due on goods imported from outside the Southern African Customs Union (SACU) and on certain manufactured goods such as liquor and tobacco. No customs duties are levied on intra- SACU trade.
As a cosignatory of the SADC Trade Protocol, Namibian importers and exporters benefit from lower or duty- free tariffs with regard to imports to or exports from other signatories to the Protocol, e.g. Zambia, Kenya,
Mozambique and Mauritius.
A free-trade agreement with Zimbabwe provides for duty-free imports of goods of Zimbabwean origin, and vice versa. However, import VAT is payable on such imports.
Preferential trade arrangements between SACU and the USA, as well as between SACU and MERCOSUR, are being finalised. Namibia’s importers and exporters will soon benefit from lower or duty-free rates being applied in terms of these trade arrangements.
The new Economic Partnership Agreement with the European Community has not been signed yet.
A portion of the levy on fuel is transferred to the Road Funds Administration for road maintenance.
Fuel levies are payable per a credit account arrangement by fuel wholesalers registered with the Ministry of Mines and Energy to Customs and Excise, based on importation of petrol, diesel and paraffin into Namibia.
The transfer duty rates are as follows (as at 31 May 2009, thus prior to the amendment of the Transfer Duty Act in line with the Minister of Finance’s Budget Speech, 2009):
Duty payable on the transfer of immovable property is as follows:
1% of the value exceeding N$100,000;
N$1,000 plus 5% of the value exceeding N$200,000;
N$11,000 plus 8% of the value exceeding N$400,000.