Overview
There are numerous accountancy and audit firms in Namibia, particularly in the capital Windhoek. Deloitte, Ernst and Young, PWC and KPMG all operate within the country. The Institute of Chartered Accountants of Namibia (ICAN) holds several seats on the Public Accountants and Auditors Board (PAAB), a statutory body tasked with supervising the activities of the profession in the country. As a member of the International Federation of Accountants (IFAC), ICAN has complied with International Financial Reporting Standards (IFRS) since 2005. Companies are required to undergo regular auditing in accordance with the Companies Act of 2004. The World Economic Forum Global Competitiveness Report (2012-2013) ranks Namibia in a strong 31st position out of 144 countries in terms of the strength of auditing and reporting standards. The World Bank Ease of Doing Business Index (2011) puts Namibia in 56th place out of 183 countries in relation to resolving insolvency, coming above South Africa which is ranked in 77th place.
Profession
There are between 100 and 200 registered chartered accountants active in Namibia. The Institute of Chartered Accountants of Namibia (ICAN) is responsible for setting accounting standards in the country, and has the right to award the ‘chartered accountant’ designation. ICAN is also closely associated with the South Africa Institute of Chartered Accountants (SAICA). The reciprocity agreement which exists between the two bodies is based on common training and examination requirements. The Namibian examining body for the Public Accountants’ and Auditors’ Board of Namibia uses the professional examinations put forward by SAICA. The Institute of Chartered Accountants in Namibia and the Institute of Commercial and Financial Accountants of Namibia are members of the Eastern Central and Southern African Federation of Accountants (ECSAFA) which aims to promote and develop accountancy standards in the region.
Tax
The tax year in Namibia runs from 1st March to 28th February. Income is taxed at progressive rates, from 0 to 37%. Companies are normally taxed at 35% on pre-tax profits; all companies incorporated in Namibia are considered resident and are taxed as such. There is no capital gains tax. VAT is at 15% (2011) with exceptions made for certain goods and services such as direct export, some food items and international transport. Tax rates for the mining sector with the exception of those mining diamonds or petroleum is set at a flat rate of 37.5%. This means that the effective tax rate for diamond mining companies is 55% and the rate for petroleum mining companies is 35%. Registered manufacturers have a fixed rate of 18% tax for 10 years. The World Bank Ease of Doing Business Index (2011) reports that with regards to paying taxes, Namibia ranks 102nd out of 183 countries. However, the score in total tax rate from the World Economic Forum Global Competitiveness Report (2012- 2013) is 9.8% which puts Namibia in 3rd place out of 141 countries worldwide.
