How to Calculate Provisional Tax in Namibia

What is Provisional Tax?

It is a method of paying the income tax liability in advance, to ensure that the taxpayer does not remain with a large tax debt on assessment.

Where and how to Calculate Provisional Tax in Namibia

To calculate provisional tax in Namibia using your basic amount; or The basic amount is the taxable income of the latest assessment, not older than 18 months. If older than 18 months, the basic amount is increased by 8% per annum.

Frequently Asked Questions

Is provisional tax the same as income tax in Namibia?

Provisional tax is a way of paying your income tax as you go. It applied when your residual income tax (RIT) is more than $5,000.

How is provisional tax calculated in Namibia?

The amount of provisional tax payable is worked out on the estimated taxable income for that particular year of assessment, as follows: The First Period: Half of the total estimated tax for the full year; Less the employees tax for this period (6 months);

How can I avoid paying provisional tax in Namibia?

The only way for taxpayers to avoid triggering provisional tax penalties is to ensure that they correctly calculate their estimated taxable income for the year of assessment and that payment of the provisional tax is made on time.

How do u calculate taxable income in Namibia?

Your Adjusted Gross Income (AGI) is then calculated by subtracting the adjustments from your total income. Your AGI is the next step in figuring out your taxable income. You then subtract certain deductions from your AGI. The resulting amount is taxable income on which your taxes are calculated.

What is provisional tax payments in Namibia?

A provisional taxpayer is required to pay instalments of income tax (called provisional tax) during the income year, rather than at the end of the year when a tax return is filed. This obligation to pay provisional tax can arise in addition to the taxpayer’s employer deducting tax from salary payments.

Is tax calculated on gross or net income in Namibia?

In this case, income tax is based on the gross salary of the employee and is deducted as a source by the employer. Moreover, the basic salary of an employee should be at least 50-60% of his/her gross salary. Let’s assume Mr. Dhruv falls between the salary range of Rs 2,00,001-Rs 5,00,000 and comes under 10% tax-slab.

What is the difference between provisional tax and PAYE in Namibia?

This includes individuals, companies and trusts. Provisional tax is income tax you pay during the year. Provisional tax helps you spread the load. RIT is the amount of tax to pay on your taxable income, less any PAYE deducted and any other tax credits you may be entitled to (except Working for Families Tax Credits).

What is turnover for provisional tax in Namibia?

Turnover – GROSS INCOME: total business income, royalties, dividends, interest and all other income, including employment income. Exclude all retirement lump sums.

How do I calculate my first provisional payment in Namibia?

Provisional tax is calculated: → using your basic amount; or The basic amount is the taxable income of the latest assessment, not older than 18 months. If older than 18 months, the basic amount is increased by 8% per annum. → Your determined taxable income.

When should I register for provisional tax in Namibia?

Any person who receives income (or to whom income accrues) other than a salary, advance or allowance, is a provisional taxpayer and should register for provisional tax at SARS. Provisional tax is not a separate tax from income tax.

What is the basic amount for provisional tax in Namibia?

Your ‘basic’ amount is your taxable income on your most recent assessment. The penalty amount will be calculated at 20% of the difference between the normal tax payable on your estimate and the lesser of: Tax on 90% of your actual taxable income. Tax on your ‘basic’ amount.

Who qualifies for provisional tax in Namibia?

Any person who receives income (or to whom income accrues) other than a salary, is a provisional taxpayer. Most salary earners are therefore non-provisional taxpayers, if they have no other sources of income.

How do I apply for provisional tax in Namibia?

You can either apply as a provisional taxpayer when you first register for a tax number with SARS, or make the change on your SARS Filing profile. Alternatively you can visit your nearest SARS branch in person.

Is provisional tax deductible in Namibia?

When you file your income tax return and calculate your tax for the year, you deduct the provisional tax you paid earlier. If your provisional tax paid is more than your RIT, you’ll get a refund and may receive interest on the difference.