PEACE OF MIND: Paulus Mbangu has condemned the taxation of pensions as "grossly unfair.” PHOTO. FILE
PEACE OF MIND: Paulus Mbangu has condemned the taxation of pensions as "grossly unfair.” PHOTO. FILE

Mbangu wants tax exemption for pensioners

‘Pensioners are suffering’
Rundu councillor Paulus Mbangu says the government should investigate tax exemption policies for pensioners.
Nikanor Nangolo
Rundu rural constituency councillor Paulus Mbangu this week condemned the taxation of pensions as "grossly unfair," arguing that it is unjust for Namibians who have paid taxes throughout their working lives to face additional taxation in retirement.

"We must not abuse our elders; they have contributed enough to the development of our country and it’s time they enjoyed a tax-free pension income," he said, calling on the finance ministry to address this issue urgently.

He said while the increased threshold on income tax exemption is a positive move, “it's not fair for individuals who have been taxed throughout their working lives to continue paying taxes after retirement. This is an abuse of pensioners, and we urge the ministry to rectify it.”

"Many of our pensioners are suffering, and we want the ministry to act. Hopefully, in the next parliamentary session or the next bill, these issues affecting pensioners and retirees will be addressed,” he said.

Mbangu made these remarks during a debate in the National Council on Monday, where lawmakers discussed a proposed amendment to the Income Tax Act of 1981.

While the amendment received support from some members of parliament, Mbangu argued that "it’s unjust for retirement benefits to be taxed repeatedly."

He added: "In my view, the ministry has let us down.”



Small business tax issues

Mbangu also emphasised that the bill fails to address the needs of small and medium-sized businesses.

"It’s unfair for someone running a barbershop or a small catering service to be required to complete tax returns. The ministry should have exempted all small businesses from taxes, just as they raised the income threshold to N$100 000. At the very least, businesses earning under N$1 million annually should be exempt," he argued.

Mbangu also criticised the current tax system, pointing out its lack of clarity and inconsistent application.

"When you ask employees of the ministry of finance, they might say we use a hybrid tax system, which includes both source-based and residence-based taxation. However, the practical application of this system is inconsistent," he said.

He further highlighted the flaws in Namibia's double taxation treaties with countries such as South Africa, the United Kingdom and Sweden.

"These agreements are intended to eliminate double taxation, but their practical implementation remains problematic. While we are taxing low-income earners, business owners with tax exemptions are benefitting unfairly, which is not right," he said.



Motivate tax payments

Meanwhile, Landless People's Movement parliamentarian Harald Kambrude also criticised the proposed amendments, arguing that tax policies should benefit citizens and encourage them to pay taxes and plan for retirement.

"They should come up with ideas that will have a positive impact, motivate people to pay their taxes, make investments and consider retirement. People want to work, but they hesitate to retire because the money they've saved is eaten up by taxes," Kambrude argued.

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Namibian Sun 2024-11-21

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