Tax policy reforms target growth, compliance

SWAKOPMUND, 26 FEB (NAMPA) – The newly-tabled 2026/27 national budget focused on tax policy and administration reforms aimed at stimulating investment, strengthening compliance and restoring fiscal sustainability.
The measures, which form part of government’s medium-term fiscal consolidation strategy, include adjustments to personal income tax brackets, accelerated capital allowances for businesses, VAT modernisation and stronger anti-avoidance rules.
Presenting the national budget on Thursday, Finance Minister Ericah Shafudah said government will introduce an Income Tax Amendment Bill in the second quarter of 2026 to revise tax brackets over two financial years.
“Adjusting the income tax brackets will reduce fiscal drag and improve fairness, while ensuring continued progressivity and adequacy of revenue,” she said.
The total revenue for 2025/26 was revised downward to N.dollars 87.4 billion from the earlier projection of N.dollars 89.4 billion and below the N.dollars 89.1 billion collected in 2024/25.
Consequently, the revenue-to-GDP ratio is expected to decline from 35.9 per cent in 2024/25 to 31.3 per cent in 2025/26.
To encourage private sector expansion, depreciation rules will be reviewed, according to the minister.
She explained that accelerated capital depreciation allows businesses to deduct the cost of qualifying capital assets faster than under normal depreciation rules.
Government will also introduce mandatory disclosure requirements for aggressive tax planning schemes in line with international standards to improve transparency and reduce tax avoidance.
The Value Added Tax (VAT) Act will be modernised, with the introduction of e-invoicing to enhance compliance and curb fraud.
“Modernising the VAT Act and implementing e-invoicing will improve legislative clarity, enhance compliance and reduce fraud,” Shafudah said.
She said the reforms are central to restoring a positive primary balance in 2026/27 and stabilising public debt, currently at 65.2 per cent of GDP.
“This budget is about restoring balance between ambition and affordability, between growth and stability,” she said.
(NAMPA)
IB/PS/AS