A Bunch of Budgets
Kitty Miv, Editor
23 November, 2021
Having taken an international view of tax affairs in last week's column, this week, we will be bringing the focus back in again, with a look at recently released Budgets and Finance Bills.
We start with Portugal, where the 2022 Budget was rejected by lawmakers, triggering snap elections. The 2022 Budget had included proposals to improve the patent box regime and introduce new investment tax breaks.
In Israel, meanwhile, lawmakers finally – and narrowly – signed off on the 2022 Budget, which was Israel's first since 2018. The Budget included few national tax measures, but did confirm the implementation of the country's new tax on plastic utensils that was introduced on November 1.
There then followed the Zambian Budget, which was full to bursting with tax reforms, including a cut to the headline corporate tax rate and mining tax regime amendments.
The Budget featured a cut to the standard corporate tax rate from 35 percent to 30 percent, with the rate for telecommunications companies remaining at 40 percent and the 15 percent concessionary corporate tax rate for the hospitality sector to be extended until the end of 2022. A corporate tax waiver is to be introduced for manufacturers of ceramics during 2022 and 2023, and the period for disallowed interest deduction carry forward will be increased to 10 years from five years.
For the mining sector, the Budget proposed making mineral royalties again deductible for corporate tax purposes, and to broaden the tax base, it proposed extending property transfer tax to transfers of mineral processing and other mine related licenses at a 10 percent rate.
The UK, meanwhile, published Finance Bill 2021-22, implementing the recent Budget. Many changes in the bill will come into effect for the next tax year starting in April 2022.
And finally, the Namibian Minister of Finance, Iipumbu Shiimi, delivered the country's 2021-22 Mid-Year Budget Policy Speech, which outlined tax reform proposals being pursued by the Government.
He announced on November 3, 2021, that an Income Tax Amendment Bill is at the initial stages of ministerial approval, which would introduce a 10 percent withholding tax on dividends paid to Namibian taxpayers. Further, it would increase the deductibility on pension fund contributions and educational policy deductions to a maximum of NAD150,000 (USD9,960) and would require new document retention obligations on taxpayers regarding withholding tax on services to boost compliance rates. The legislation is to be tabled in the next session of parliament.
Additionally, an amendment to the Value-Added Tax Act, which is also at the initial stages of ministerial approval, would extend VAT to fees charged by asset managers, among other measures.
The Minister also announced that "the Government is still exploring options to reduce the non-mining company tax, with consideration to effect it in the outer years of the next MTEF." Namibia's current MTEF, outlined in March 2021, covers the three-year period 2021/22 to 2023/24.
Until next week!
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