Namibia to phase out Export Processing Zone

Namibia to phase out Export Processing Zone
Photo credits: 
NAMPA

As a result of being blacklisted by the European Union (EU) as a tax haven, Namibia will phase out the Export Processing Zone (EPZ) and replace it with the Special Economic Zone (SEZ).
Finance Minister Calle Schlettwein has submitted to the National Assembly (NA) the Income Tax Amendment Bill that seeks to abolish EPZ tax incentives.
The move comes against the backdrop of Namibia once classified by the EU as a tax haven due to tax evasion loopholes created by the EPZ.
The EPZ was tailored to attract foreign investment, among others.
To encourage foreign investment, a complete tax relieve was given as a reward under the EPZ.
This tax relief for EPZ enterprises applies for an indefinite period or for the lifetime of the approved projects in Namibia.
When the EU classified Namibia as a tax haven, it pointed to the EPZ regime as a harmful tax regime that allows tax evasion that has also led to treasury losing money in uncollected taxes.
Namibia has since become a member of the Global Forum on Transparency and Exchange of Information for Tax Purposes.