Tax Court bill tabled in parliament

The government is planning to establish an independent Tax Court after a High Court ruling found key provisions governing the country's tax dispute system unconstitutional, leaving taxpayers without a specialised forum to challenge tax decisions.

Finance minister Ericah Shafudah on Tuesday tabled the Income Tax Amendment Bill 2025 in parliament, which seeks to create a Tax Court as part of the High Court system to hear income tax and value-added tax (VAT) appeals and other tax-related disputes.

Shafudah said the reforms are intended to correct constitutional defects identified by the courts while strengthening fairness, transparency and public confidence in the country's tax administration.

Constitutional defect

"I rise to lay before this August House the Income Tax Amendment Bill, which seeks to establish a Tax Court responsible for adjudicating income tax and value-added tax appeals, and to introduce amendments that clarify the distinct roles of the Minister and the Commissioner of the Namibia Revenue Agency regarding the administration of the Income Tax Act," she said.

The minister explained that under the Income Tax Act of 1981, the finance minister had powers both to administer the Act and to establish the Special Tax Court that heard tax disputes.

According to Shafudah, this arrangement was found to violate the constitutional principle of the separation of powers because the minister could both oversee tax administration and influence the structure of the court responsible for adjudicating disputes arising from those decisions.

"On the one hand, the Minister had the authority to constitute the Special Tax Court and appoint its members; on the other hand, the Minister was empowered to administer the provisions of the Act," she said.

"This state of affairs was considered to compromise the principles of a fair trial as articulated in Article 12 of the Constitution."

Court dissolved

The minister said the High Court declared the provisions relating to the constitution of the Special Tax Court and the appointment of advisers unconstitutional in 2021, effectively bringing the institution to an end.

"As a result, the Special Tax Court ceased to exist as an institution under the law. Taxpayers were therefore left without a specialised legal forum in which to have their tax disputes heard," Shafudah said.

The proposed legislation would replace the defunct Special Tax Court with a permanent Tax Court that forms part of the High Court system as envisaged under Articles 78 and 80 of the Constitution.

The court will hear appeals relating to income tax and VAT and will also be empowered to determine other disputes referred to it under law.

Independent institution

Shafudah said the new institution will operate independently and will serve as a safeguard against unfair treatment in tax administration.

"The Tax Court will be an independent judicial institution tasked with rendering fair and objective decisions free from external influence. It will serve as a guardian of transparency and fairness within the tax system."

She added that the court's establishment would strengthen public confidence in the country's tax framework and promote integrity within the revenue system.

Two-tier process

The bill also clarifies the hierarchy between the Tax Tribunal and the proposed Tax Court.

Under the new arrangement, taxpayers dissatisfied with assessments issued by the Namibia Revenue Agency (NamRA) will first approach the Tax Tribunal. Appeals against decisions of the tribunal will then be heard by the Tax Court.

"The Tax Tribunal will serve as the court of first instance, where taxpayers may challenge assessments issued by the Namibia Revenue Agency. The Tax Court, on the other hand, will function as an appellate body," Shafudah said.

Powers realigned

Another reform shifts administrative powers contained in the Income Tax Act from the minister to the commissioner of NamRA.

Shafudah said this reflects the establishment of NamRA in 2017 and formally aligns tax administration responsibilities with the revenue authority.

"This amendment therefore reallocates the relevant administrative functions to the Commissioner of the Namibia Revenue Agency," she explained.

Composition and relief

The Tax Court will be presided over by a High Court judge and supported by specialist assessors appointed to advise on complex matters. The Registrar of the High Court will also serve as the Registrar of the Tax Court.

The government believes the reforms will not only strengthen constitutional governance but also ease pressure on the High Court by creating a specialised judicial forum for tax disputes.

"This Bill seeks to clarify the distinction between executive and judicial authority through the establishment of a dedicated Tax Court. It will also help alleviate capacity constraints within the High Court," Shafudah said.