Event organisers react to NamRa’s withholding tax

The Namibia Revenue Agency’s introduction of the withholding tax on foreign entertainers' services has sparked concerns within the local entertainment industry. While NamRa seeks to enforce compliance with tax regulations, event organisers and stakeholders in the sector are grappling with the potential financial implications and challenges posed by this new tax requirement.

Namibian Sun reached out to local event organisers to gather their opinions on this tax regulation.

Gordon Jay from Mindscape Events Namibia, the events company that hosted Burna Boy for his Love Damini tour in Windhoek last year, shared that as an event organiser who frequently engages foreign entertainers, he is cognizant of the significant consideration surrounding the payment of income tax on performers.

Jay added that the entertainment industry, despite its allure and glamour, is inherently risky and often overlooked, particularly when it comes to the financial burdens faced by event organisers, who often have limited sponsorship opportunities. “Notably, artists typically charge fees that exclude taxes, in addition to other expenses like travel, accommodations, and hospitality. Consequently, the requirement to pay income tax on top of these costs poses an additional financial burden for event organisers, who already shoulder the responsibility for the event's overall costs and success not to mention that some of these events can flop and fail to break even.”

While acknowledging the strain imposed, Jay maintains that it is imperative for event organisers to comply with income tax requirements, as they are legal obligations and contribute to the government's revenue generation and the country's development. Jay believes that despite the financial challenges, event organisers can mitigate risks through meticulous event planning and budgeting. “Exploring innovative avenues for revenue generation, such as securing sponsorships, grants or partnerships, can also help alleviate the burden.

“Ultimately, it is crucial for these policies to consider striking a balance between the financial burdens faced by event organisers and the growth and sustainability of the events industry,” Jay said.

Joseph Gabriel, the founder of the gospel concert ‘Heal Our Land’ which has previously hosted renowned South African stars Zaza Mokheti and Dumi Mkokstad in Namibia, expressed his reservations. He voiced concerns about the impact of this income tax requirement on event budgets, explaining that event organisers already have numerous service providers to pay when organising events.

Gabriel stated, "I do not see how this will work because it will compromise our budgets as event organisers when it comes to bringing in artists from outside the country."

Jaimeelou Motoomull, an event organiser from The Loft, shared similar sentiments. She argued that income tax is already part of the expenses incurred when running a club. She added that this new tax requirement would adversely affect the local music business, potentially deterring event organizers from hosting international acts.

"As the entertainment industry, we feel targeted by NamRa. There are many benefits that come with bringing international acts to Namibia. Not only the entertainment value, but they also inspire our local acts to produce world-class performances. All of these benefits will be affected by this Act," she said.