The Value-added Tax Act in Namibia imposes a liability to pay VAT on (a) every taxable supply of goods and services and (b) every import of goods into Namibia.
We will focus in this article on the different rules and procedures on the collection of import VAT when goods are imported for home use into Namibia.
On which value is import VAT calculated
The VAT Act prescribes the higher of the “free-on-board” value, uplifted by 10%, or the open market value that must be declared to Customs and Excise on importation into Namibia.
Put in simple terms, the “free-on-board” value is the price charged by the exporter or supplier on its invoice to the importer in Namibia, which should include all costs relating to the sale and transport up to the point of export.
The invoice value is used by the clearing agent at the border and the Customs system (“Asycuda”) will automatically increase this value with 10%. Considering that the VAT rate is 15%, the effective import VAT will be 16.5% of the invoice value (15% multiplied with the invoice value uplifted by 10%).
The open market value of the goods must be used if it is higher than the free-on-board value.
How must the import VAT be paid to Customs and Excise?
Import VAT is payable at the time of importation before the goods may be released to the importer.
Customs and Excise accepts cash (Namibia dollar or South African rand) and a receipt is issued. Most border posts also have bank vending machines for payment by debit or credit cards.
If the importer is registered for VAT and has an import VAT account issued by Inland Revenue, the import VAT may be deferred at the time of importation but must be paid to Inland Revenue before or on the 20th of the next month.
It is also possible to deposit the import VAT in the Customs and Excise account at the Bank of Namibia (BoN) through the electronic funds transfer (EFT) procedure. The deposit must first be cleared at the BoN and confirmed by Customs and Excise head office before the Customs border office can issue a receipt and release the goods.
Since this process can take up to 2-3 working days, it is strongly suggested to use this procedure at least 2-3 days before the goods will arrive at the border.
Can I claim the import VAT back?
If you are a private importer and not registered for VAT, the import VAT paid to Customs at the time of import cannot be claimed back. This is a tax that is paid by the end-user like the VAT payable when buying goods from a shop.
Businesses that are registered for VAT may claim back the import VAT paid in the furtherance of a taxable activity.
Compulsory written instructions to clearing agent
Customs and Excise Namibia recently issued an internal memorandum to all border posts, airports and harbours making it compulsory for importers to provide a written authorisation to their clearing agents.
The Form NA_CIPF must be completed and signed by the importer in Namibia with for example truck, ship or aircraft identification. Details of a specific consignment is required. This new instruction is in force as from 1 July 2020.
To avoid long delays at the borders, importers should provide the signed authorisation well in advance to their clearing agents.