Bi-weekly tax series: What can I deduct for tax purposes in my own name?

Although salaried employees are limited, by tax law, as to what they can deduct from their income, there are a few things that can be claimed. Deductions against income reduce your taxable Income and thus reduce the amount of tax owing to Inland Revenue. The allowable tax deductions are:

  • Income protection contributions where you take out a policy with a service provider in the case you are no longer able to work anymore
  • Donations paid to registered Public Benefit Organisations - for example a charity, provided that you have a certificate from them that allows this deduction. Please refer to the December 2016 issue of PwC Tax alert for more details on this 
  • Wear & Tear on assets used for work - for example computer equipment, mobile phones, machinery – mostly applies to business individuals
  • Business individuals conducting business in their personal name can deduct all expenses that they incur in the production of their income as long as it is not capital of nature (for .e.g. acquisition of assets and costs incurred to set up new businesses etc)
  • If you mainly work from home and mostly earn commission then costs relating to the office in your home may qualify provided that certain requirements are met
  • Contributions to an approved pension or provident fund is tax deductible
  • Retirement Annuity contributions paid is tax deductible
  • Study Policy Contributions: Current premiums paid by the employee under any policy of insurance for education purposes is tax deductible provided that proof of the payment of such premiums has been furnished to the employer.

The aggregate of the amounts that may be deducted in terms of an approved pension, provident, retirement annuity (RA) and study policies may not in any year of assessment exceed the amount of N$40 000.00 per annum.

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