WORLD TRADE
ORGANIZATIONG/SCM/N/3/NAM
G/SCM/N/16/NAMG/SCM/N/25/NAM
G/SCM/N/38/NAM
G/SCM/N/48/NAM
6 July 1999
(99-2789)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
New and Full and Updating Notifications Pursuant to Article XVI:1
of the GATT 1994 and Article 25 of the Agreement
on Subsidies and Countervailing Measures
NAMIBIA
The following notification, dated 11 June 1999, has been received from the Ministry of Trade
and Industry in Namibia.
_______________
In accordance with Article 25 of the Agreement on Subsidies and Countervailing Measures,
and Article XVI:1 of the GATT 1994, the Government of Namibia is hereby forwarding its 1995 and
1998 new and full notifications and the 1996, 1997 and 1999 updating notifications, its Special
Incentives for Manufacturers, Exporters of Manufactured Goods and for Export Processing
Enterprises which might fall within the meaning of Article 1.1 and Article 2 of the SubsidiesAgreement as well as Article XVI:1 of the GATT 1994.
There are no statistical data available on trade effects.
TABLE OF CONTENTS
Page
INTRODUCT ION................................................................................................................... ..........2
1. INCENTIVES FO R MANUFACT URERS .......................................................................3
1.1 TAX INCENTIVES FO R MANUFACTU RERS..................................................................3
1.1.1 Tax abatement ...........................................................................................................3
1.1.2 Establishment tax packag e for new investments.......................................................3
1.1.3 Special building allowance........................................................................................31.1.4 Tax incentives for export promotion activities..........................................................3
1.1.5 Additional deductions for production line wages and training .................................4
1.1.5.1 Production line wages ...............................................................................................4
1.1.5.2 Training expenses......................................................................................................4G/SCM/N/3/NAM, G/SCM/N/16/NAM,
G/SCM/N/25/NAM, G/SCM/N/38/NAM,
G/SCM/N/48/NAM
Page 2
                                                                                                                               Page
1.2 NON-TAX INCENTIVES FOR MANUFAC TURERS........................................................5
1.2.1 Cash grants and lo ans for expo rters ..........................................................................5
1.2.2 Industrial studies .......................................................................................................5
2. INCENTIVES FOR EXPORTER S OF MANUFACTURE D GOODS ..........................5
2.1 Tax allowance on income derived from the export of manufactured goods .............5
3. EXPORT PROCESSING ZONE INCE NTIVES..............................................................5
3.1 Tax incentives for EPZ enterp rises ...........................................................................5
3.2 Other incentives fo r EPZ enterprises ........................................................................6
4. REGISTRATION AND IM PLEMENTA TION................................................................6
For further details please contact: ............................................................................................ ...........6
SPECIAL INCENTIVES FOR
MANUFACTURERS AND EXPORTERS
January 1999
INTRODUCTION
The Government of the Republic of Namibia is committed to stimulate economic growth and
employment and to establish Namibia as a gateway location in the Southern African region.
Incentives are largely concentrated on stimulating manufacturing in Namibia and promoting
exports into the region and to the rest of the world.
The following tax general regulations are indicative of Government commitments:(a) Non-resident Shareholders' Tax is only 10 per cent;
(b) Dividends accruing to Namibian companies or resident shareholders are tax exempt;
(c) Plant, machinery and equipment can be fully written off over a period of three years;
(d) Buildings of non-manufacturing operations can be written off, 20 per cent in the first
year and the balance at 4 per cent over the ensuing 20 years (manufacturers
operations have even more generous allowances);
(e) Import of purchase of manufacturing machinery and equipment is exempted from
General Sales Tax and Additional Sales Duty;
(f) Preferential market access to the European Community, United States and other
markets for manufacturers and exporters is provided.
To make manufacturing in Namibia more competitive, Government has introduced a further
package of tax and non-tax incentives, applicable to both existing and new manufacturing enterprises.G/SCM/N/3/NAM, G/SCM/N/16/NAM,
G/SCM/N/25/NAM, G/SCM/N/38/NAM,
G/SCM/N/48/NAM
Page 3
1. INCENTIVES FOR MANUFACTURERS
1.1 Tax Incentives for Manufacturers
1.1.1 Tax abatement
The Government has allowed a 50 per cent special tax deduction on the taxable income
derived from manufacturing enterprises for a period of five years, to be phased out on a straight-line
basis over a subsequent period of 10 years.  This abatement is applicable to all operations approvedand registered as manufacturers by the Ministry of Finance in consultation with the Ministry of Trade
and Industry.
1.1.2 Establishment tax package for new investments
Where companies wish to establish a new manufacturing venture in Namibia, or relocate an
existing operation to Namibia, a special tax package may be negotiated through the Ministry of Trade
and Industry, which then makes appropriate recommendations to the Ministry of Finance.  The
Minister of Finance is empowered to grant, in consultation with the Minister of any line Ministry,
special conditions to certain manufacturing enterprises on:
(a) the rate of tax payable, and
(b) the terms under which this rate shall apply.
To be considered for an establishment tax package, a full feasibility study must be presented
showing that:
(i) existing industry will not be unfairly disadvantaged, and
(ii) the enterprise will contribute positively to Namibia's long-term economic growth.
The conditions, as negotiated, will be published in the Government Gazette as soon as they
have been approved by the Ministry of Finance.
1.1.3 Special building allowance
Buildings erected by manufacturing enterprises for manufacturing purposes (i.e. not including
office buildings), can be written off at the rate of 20 per cent in the first year and the balance at 8 per
cent over the ensuing 10 years.
1.1.4 Tax incentives for export promotion activitiesThe following expenditure, which is already fully deductible for tax purposes, will be allowed
as an additional deduction from income according to the percentages  prescribed in (i) to (iii) below:
(a) research on the marketing of goods in a foreign country;
(b) advertising and soliciting of orders in a foreign country, including attendance of
approved foreign trade exhibitions and outward trade missions, economy air fare,
local travel and accommodation and exhibition costs;G/SCM/N/3/NAM, G/SCM/N/16/NAM,
G/SCM/N/25/NAM, G/SCM/N/38/NAM,
G/SCM/N/48/NAM
Page 4
(c) provision of samples or technical information to prospective customers in a foreign
country;
(d) bringing prospective buyers from a foreign country to Namibia, including economy
air fares and accommodation;
(e) preparation or submission of tenders or quotations in respect of goods to be exported
to a foreign country;
(f) expenditure incurred to finalize contractual agreements;
(g) the appointment of agents in foreign countries.
The additional deduction in respect of the above expenses is as follows:
(i) 25 per cent if the current export turnover exceeds the basic export turnover1
by 10 per cent or less;
(ii) 50 per cent if the current export turnover exceeds the basic export turnover by
more than 10 per cent, but less than 25 per cent;  or
(iii) 75 per cent if the current export turnover exceeds the basic export turnover by
25 per cent or more.
These export promotion incentives will only be granted on approval of the programme stating details
of the envisaged export promotion venture and the expected resultant exports.
1.1.5 Additional deductions for production line wages and training
An additional deduction of 25 per cent will be allowed for registered manufacturing
enterprises in respect of wages paid to production line workers and training costs.
1.1.5.1 Production line wages
As an encouragement to manufacturing enterprises to utilize more labour intensive processes,
an additional deduction from income of 25 per cent will be allowed in respect of wages paid to
Namibian workers directly involved in the manufacturing process.  For example if an enterprise has
an approved remuneration package of N$100,000 to such workers, N$125,000 will be allowed as a
deduction from taxable income.
1.1.5.2 Training expensesThe Government believes that efficiency in the manufacturing sector can be increased
dramatically through the professional training of technical personnel.  An additional deduction of25 per cent from income will be allowed on approved technical training expenses.
                                                     
1 Where the "basic export turnover" is defined as the average export turnover of the preceding three
years, as supported by an audit certificate.G/SCM/N/3/NAM, G/SCM/N/16/NAM,
G/SCM/N/25/NAM, G/SCM/N/38/NAM,
G/SCM/N/48/NAM
Page 5
The content, duration and costs of training programmes and a list of candidates must be
forwarded to and approved by the Ministry of Finance, in consultation with the Ministry of Trade and
Industry and the Ministry of Labour and Human Resource Development.
1.2 NON-TAX INCENTIVES FOR MANUFACTURERS
1.2.1 Grants and loans for exporters
To further assist exporters in securing new ma rkets, export promotion funding of efforts as
detailed in Section 1.1.4, will be considered, up to a maximum of 50 per cent of direct costs.  Suchexport promotion activities must be pre-approved by the Investment Centre and can, on the basis of
substantive quotations and/or invoices, be paid in advance, subject to full verification of expenditure
within 30 days.
1.2.2 Industrial studiesStudies undertaken by Government, whether on its own initiative or on request of private
sector enterprises, can be made available at 50 per cent of their production cost to companies that
wish to develop investment opportunities.  Executive summaries will be made available for perusal
free of charge.  Requests by the private sector for commissioning such studies will only be consideredwhere full project proposals and pre-feasibility studies are submitted.
2. INCENTIVES FOR EXPORTERS OF MANUFACTURED GOODS
2.1 Tax allowance on income derived from the export of manufactured goods
Government intends to promote Namibia as a tr ading centre within Southern Africa.  Taxable
income derived from the export of manufactured goods, with the exception of fish and meat products,
whether they have been produced in Namibia or not, shall be reduced by an allowance equal to 80 per
cent of the amount.
3. EXPORT PROCESSING ZONE INCENTIVES
Enterprises which undertake manufacturing, assembly, repackaging and break-bulk operation
and gear all or almost all of their production for export, earn foreign exchange and employ
Namibians, will be eligible for EPZ status, which confers an attractive range of both tax and non-tax
benefits.
3.1 Tax incentives for EPZ enterprises
Enterprises with EPZ status do not pay:
(a) corporate tax;
(b) import duties on imported intermediate and capital goods;
(c) sales taxes, stamp and transfer duties on goods and services required for EPZ
activities;
These benefits are of unlimited duration.G/SCM/N/3/NAM, G/SCM/N/16/NAM,
G/SCM/N/25/NAM, G/SCM/N/38/NAM,
G/SCM/N/48/NAM
Page 6
3.2 Other incentives for EPZ enterprises
• Because Government recognizes the considerable costs of establishing new operations and
training a new workforce, EPZ enterprises investing in upgrading the skills and productivity
of Namibian workers will receive a grant to cover a substantial part of the direct costs of on-
the-job and institutional training.  The grant is paid by the Government on the basis of pre-
approved training plans, once training is complete.
• EPZ enterprises are also allowed to hold foreign currency accounts in local banks.
• They also enjoy industrial calm as no strikes or lock-outs are allowed in the EPZ-regime.
• Companies operating under the regime are free to locate their operations anywhere in
Namibia.
• Through the Offshore Development Company, EPZ enterprises also have access to factory
facilities rented at economical rates.
4. REGISTRATION AND IMPLEMENTATION
All manufacturing concerns claiming incentives must first register with the Ministry of Trade
and Industry, and, in respect of Taxation Incentives, must also be registered with the Ministry of
Finance.  The Minister of Finance is empowered to prescribe accounting procedures and regulations
for manufacturing enterprises qualifying for Taxation Incentives.  To promote control and prevent the
misuse of Taxation Incentives, enterprises qualifying for such incentives will not be relieved of theduty to submit full substantiated annual tax returns.
For further details please contact:
The Investment Centre
Ministry of Trade and Industry
Private Bag 13340
Windhoek, Namibia
Tel:  +264-61-2837335
Fax:  +264-61-220278E-mail: ………………………………..
To obtain EPZ status, applicants should apply to the Investment Centre or
The Offshore Development Company
Private Bag 13397
Windhoek, Namibia
Tel:  +264-61-2837360/2837311
Fax:  +264-61-231001
E-mail: ……………………………….G/SCM/N/3/NAM, G/SCM/N/16/NAM,
G/SCM/N/25/NAM, G/SCM/N/38/NAM,
G/SCM/N/48/NAM
Page 7
The Walvis Bay
EPZ Management Company
Private Bag 5017Walvis Bay, Namibia
Tel:  +264-64-205095/7
Fax:  +264-64-206132
E-mail:  ………………………………G/SCM/N/3/NAM, G/SCM/N/16/NAM,
G/SCM/N/25/NAM, G/SCM/N/38/NAM,
G/SCM/N/48/NAM
Page 8
Summary of Special Incentives for Manufacturers and Exporters
REGISTERED
MANUFACTURERSEXPORTERS OF
MANUFACTURED
GOODS (excluding
meat and fish products)EXPORT
PROCESSING ZONE
ENTERPRISES
Eligibility and
Registration• Enterprises engaged in
manufacturing
• Application to the
Ministry of Trade andIndustry and approval
by Ministry of
Finance• Enterprises that export
manufactured goods,whether produced inNamibia or not
• Application and
approval by the
Ministry of Finance• Enterprises engaged in
manufacturing,assembly, packaging orbreak-bulk andexporting mainly to
outside of SACU
markets
• Application to the EPZ
committee, through theODC or EPZMC
Corporate tax 50 per cent abatement for 5years, linear phasing out of
abatement over the
following 10 years80 per cent allowance on
taxable income derived from
exporting manufactured
goods, unlimited durationExempt
GST/ASD Exemption on purchase
and import ofmanufacturing machineryand equipmentNormal treatment Exempt
Stamp & Transfer
DutyNormal treatment Normal treatment Exempt
Establishment
Tax PackageNegotiable rates and terms
of special tax packageNot eligible Not eligible
Special Building
AllowanceBuilding written off at
20 per cent in first yearand balance at 8 per centfor 10 yearsNot eligible Not eligible
Export Promotion
AllowanceAdditional deduction from
taxable income of between
25 per cent and 75 per centNot eligible Not eligible
Incentive for
Training andProduction wagesAdditional deduction from
taxable income of 25 percentNot eligible Substantial, issued by
government uponimplementation ofapproved trainingprogramme
Industrial studies Available at 50 per cent of
costNot eligible Not eligible
Cash grants 50 per cent of direct cost
of approved exportpromotion activitiesNot eligible Not eligible
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