The Ministry of Finance has taken steps to ensure taxpayers receive their refunds earlier than the usual March to June period, to provide relief by speeding up the refund process.

The Ministry issued a notice granting employers time to reimburse the PAYE order deducted from employees between March and September this year by deducting the reimbursed PAYE from the monthly employee's tax amount to be paid to NamRA between 01 October 2024 and 28 February 2025.

Finance Minister Iipumbu Shiimi stated that employers will ensure that the total amount of employee tax deducted for the 2024-2025 year of assessment will be equal to the amount of employee tax due as per the new statutory tax rates.

In his ministerial statement, Iipumbu addressed the misconception that requiring employers to refund PAYE could lead to business closures, explaining that employers should simply deduct PAYE reimbursements from the tax payments made to NamRa.

This way, he said, the process operates on a net basis with no cash flow impact on employees.

"We take note that there could be instances where employers do not have sufficient tax payable liabilities to effect the full PAYE reimbursements to all employees in a single month. As such, we did not prescribe a period within which employers should process the refunds. We trust that employers will determine the reimbursement period following a comprehensive assessment of their respective monthly cashflows, payroll size, and systems, as well as their internal operations and administrative procedures." 

He explained that if employers do not have sufficient tax payable to cover the refunds, employees will need to claim their refunds when they submit their 2025 tax returns between March and June next year.

RDP's Kennedy Shekupakela questioned Shiimi as to why employers should take the burden to pay employees and not NamRA.

In response, Shiimi said, "There is no burden created on the employer; the employer was going to pay this money over to NamRA anyway, so we are just saying instead of paying this money to NamRA, pay what is due to the employee and pay the balance to NamRA so nobody is owing an employee."