The Ministry of Finance and Public Enterprises says it is establishing Special Economic Zones (SEZs) in collaboration with the Ministry of Industrialisation and Trade to cultivate competitive industrial zones in the country.
Minister of Finance and Public Enterprises Ipumbu Shiimi said participants in the SEZs will benefit from a corporate income tax rate of 20%, accompanied by standard deductions in terms of capital allowances and zero-rated VAT within the designated zones.
The SEZs Bill is scheduled for presentation in the National Assembly during the fiscal year 2024/25, preceding the expiration of the Export Processing Zone regime in 2025.
“The corporate income tax rate of 20% to be proclaimed under the proposed SEZ regime will also be applicable to SMEs with annual turnover below a predefined threshold. The SME threshold will be published in due course. Additional details regarding SME eligibility will be communicated in due course,” Shiimi said while delivering the 2024-2025 budget speech in the National Assembly on Wednesday.
Industrialisation and Trade Minister Lucia Iipumbu had earlier noted that this National Policy on SEZ aims to reform the current Export Processing Zone and manufacturers’ incentive regimes into a new Special Economic Zone framework.
She said the National Policy on SEZ promotes and develops a comprehensive regime for SEZs, to attract both domestic and foreign investment.
This is in addition to the diversification of Namibia’s productive and export structure whilst deepening both backward and forward linkages with the rest of the economy, states the Ministry’s draft 2021-2026 National Policy on Sustainable Special Economic Zone.
“It aims at elevating the production of high value-added goods, services and high technology whilst encouraging the attainment of internationally accepted standards of quality. SEZs will also propel Namibia’s integration into the regional, continental and global value chains with the stated aim to optimise on expanding market opportunities,” she said.
The policy is further working towards advancing the beneficiation of the country’s mineral resources and developing excellent infrastructure to support the targeted industries in each region.
The SEZ Policy will further promote free-trade zones that are fenced-in, duty-free areas, and offer warehousing, storage, and distribution facilities for trade, transhipment, and re-export operations.
