Zim, Namibia in double taxation negotiations

ZIMBABWE and Namibia officials are in the process of re-negotiating the double taxation agreement (DTA) which will see the two countries laying out a framework to avoid double taxation of citizens, while also preventing the evasion of taxes on incomes.

By Wongai Zhangazha

The details are contained in Namibia’s cabinet resolutions of the eighth Decision-Making Meeting held on June 6, seen by the Zimbabwe Independent.

Avoidance of double taxation is an agreement concluded between one country and another jurisdiction to relieve double taxation of income that is earned in one jurisdiction by a resident of the other jurisdiction.

If there is a double taxation agreement, this may state which country has the right to collect tax on different types of income.

A Zimbabwean delegation of senior bureaucrats is currently in the Namibian capital, Windhoek, for discussions.

“Ministry of Finance to re-negotiate the Double Taxation Agreement-technical officials from Namibia and Zimbabwe to meet before June 30 2017. Ministry of Works and Transport to consider the draft MoU on the technical cooperation in civil aviation to be concluded by June 30 2017,” reads the minutes.

“Ministry of Mines and Energy to consider the MoU training of Namibian Students at the Zimbabwe School of Mines.

“Ministry of Health and Social Services — to follow up on the signed MoU on co-operation in the field of Health.

“Minister of Sport, Youth and National Service to follow up on the signed Sports Cooperation. Ministry of Gender Equality and Child Welfare — to follow up on the signed MoU concerning cooperation towards the promotion of the empowerment of women, gender equality and community development.”

Apart from the DTA, Namibian government in the minutes instructed its Industrialisation, Trade and Small and Medium Enterprise Development ministry to consider the memorandum of understanding (MoU) on the implementation of the “annexure to the Preferential Trade Agreement to be concluded by June 30 2017”.

The Industrialisation ministry was also instructed to consider the MoU on the promotion of small and medium enterprises development for finalisation by June 2017.

The Namibian cabinet took note of the agreed minutes and reports on the fourth round of diplomatic consultations and eighth session of the Namibia-Zimbabwe Joint Permanent Commission of Cooperation.

The diplomatic sessions and the eighth session of the JPC were held in Harare on April 24, at a time Namibian president Hage Geingob (pictured) was preparing to open the Zimbabwe International Trade Fair (ZITF).

The minutes noted that the Namibian deputy prime minister and the International Relations and Foreign Affairs minister made submissions on the state visit to Zimbabwe from April 24 to 28, which culminated in Geingob officially opening ZITF

In April last year Zimbabwe ratified the double taxation agreement concluded with South Africa (SA) in August 2015 through the gazetted statutory instrument 40 /2016.

The new agreement that will enter into force, once ratified by South Africa, replaces the outdated deal between South Africa and then Southern Rhodesia, signed in 1965.

According to reports in South Africa, the DTA is to apply to normal tax, dividends tax, withholding tax on interest and royalties and the tax on foreign entertainers and sportspersons.

While in Zimbabwe it will apply to income tax, non-resident shareholders’ tax, capital gains tax and the non-resident tax on fees, royalties and interest.