NATIONAL INTERNSHIP PROGRAMME & YOUTH TAX ALLOWANCE

This is a programme which has been launched by the Namibian Government, to support the efforts of employers in Namibia to employ and onboard interns at organizations. Government will forfeit corporate tax, in lieu of increasing the number of interns employed by various employers

The programme is based on the amendments to the Income Tax Amendment Act, 2024 and associated regulations.

For the purpose of this programme, an internship refers to the period where an intern undertakes on-the-job training at an approved employer’s premises (physical or virtual). An intern in this case refers to any individual who seeks to obtain work experience for certification, professional registration purposes or just to gain practical work experience. These individuals vary from school leavers to university graduates and professionals.

At this time, since this is a tax-based incentive, only employers who are in good standing and pay corporate taxes will be eligible. In the coming months, the Ministry of Finance will roll out further incentives for employers who do not pay corporate taxes.

Only employers who pay corporate taxes and are in good standing with the receiver of revenue will pay less corporate taxes provided that they take on interns and complete such programmes and are recognised by a Designated Authority.

To ensure the quality of internship programmes as well as minimise the abuse of taxes, the Ministry of Finance has gazetted the appointment of Designated Authorities (Government Notice No. 397, December 2024). These bodies are charged with the responsibility of “certifying internship agreements.” This entails the assurance that an employer has the capacity to offer internship programmes. Designated Authorities are per industry sector, where applicable. Any employer who cannot identify a line Designated Authority is advised to contact the NIPDB. Below is a list of Designated Authorities.

An employer who has or intends to onboard interns should contact the appropriate Designated Authority or the NIPDB to obtain recognition. It is important to note that an employer who is not recognised by a Designated Authority will not benefit from the tax incentive.

The National Internship Programme is implemented on the basis of employer willingness and affordability. No employer is compelled to participate but encouraged to play a role in bridging this gap.

No. An employer is welcome to offer further opportunities to individual/s that appeal to the employer but is not mandated to offer employment. The programme is designed to provide work experience and readiness for employment.

The duration of an internship programme is dependent on the specific industry. Some employers offer internships for 3 months and others for 1 year. Under the current legislative amendments, internships vary from 3 months to a maximum of 3 years.

The number of interns that an employer has is dependent on the profile of the employer. This is why the certification process is important. It is critical that the employer has the capacity to offer the opportunities, which would include the facilities, equipment and the close supervision of the interns.

Employers are encouraged to source for interns by following their organisational policies and recruitment processes.

The NIPDB has developed a platform which can aid employers in creating awareness for employers seeking interns. Employers are encouraged to visit https://studyopportunities.nipdb.com/

The Youth Tax Allowance is effective as from 1 January 2024. The programme is however also linked to an employer tax year i.e. the tax period for an employer.

Employers will be required to register interns for applicable statutory obligations where the law requires.

Ideally, a typical programme will work in the following manner:

1. Employers will engage the line Designated Authority to seek recognition.

2. Employers will advertise and recruit interns. Employers are welcome to also use the study opportunities platform via https://studyopportunities.nipdb.com/

3. Employers will implement the internship programme and remunerate the interns

4. At the end of the financial year when the employer is making submissions for tax filing, the employer will complete the applicable schedule on the NamRA form.

(A / B) times C minus C

• A represents 50%

• B represent corporate tax rate 30% (applicable for the tax year)

• C represents, the lesser of the actual cost incurred or N$50,000

The Ministry of Finance has issued an instruction for all OMAs to enrol interns. These will not be beneficiaries of the tax incentive.

The tax incentive is available to all taxpayers subject to the Income Tax Act of 1981 as amended.

Any company registered in Namibia for business purposes and tax purposes is welcome to participate in the programme, including foreign owned companies. However, once again, it will be on the basis of willing employers and affordability.

Currently, the only provision made is for internships within the country. Future deliberations could include conversations supporting internships outside the country.

If the intern is a Namibian employer & taxpayer such internship qualifies.