The primary element of a strong nation is a vibrant civil society. Over the past decades, there has been a steady rise in the growth and development of various types of nonprofits. This advancement is considered the major factor that has spurred the promotion of democracy and development across the globe.
Namibia has also benefited from the growth of non-government entities. The country continues to record an increase in the development of the nonprofit sector.
This article seeks to outline the various types of nonprofits in Namibia and their operations.
- The various types of nonprofits in Namibia qualify for income tax exemptions including exemption from VAT.
- The law also makes allowance for substantial custom duty rebates.
- A large number of formal NGOs in Namibia are registered as trusts
What are the types of nonprofits in Namibia?
There are four nongovernmental organizations recognized by the legislative act of Namibia. They are;
1. Voluntary Associations: these types of nonprofits exist under common law and have quite minor regulatory provisions. Voluntary associations are membership-based. A few examples include community-based organizations, clubs, student bodies, faith organizations, associations around a specific issue such as cancer associations, and theatre groups.
A voluntary association can also be established as a temporary institution created to provide a product or service to the public. However, it is inclined to serve on a local basis eg a school club.
2. Companies (Companies not for gain): these types of nonprofits can be incorporated by a group of individuals who unite under an association with a legal objective that does not involve making profits. These organizations are registered by the Companies Registration Office based on the Companies Act 2004. Companies not for gain are incorporated as companies limited by guarantee. The organization is also required to have a minimum of seven members and two directors.
3. Welfare Organizations: these types of nonprofits may choose to apply to the Ministry of Health and Social Services. The purpose for registering such institutions should constitute charitable activities, social work, improvement of animal welfare and obtaining funds to meet those demands.
Welfare organizations in Namibia are required to be registered as their funds are obtained partly or entirely from the State, local authority or the public.
4. Trusts: these types of nonprofits are created under the Act of parliament and are not established as membership organizations. They are rather governed by a Board of Trustees appointed by the Trust.
Trusts are voluntary organizations created to promote a particular purpose. The Trust Deed is an official legal document that is registered with the Master of the High Court.
What are the tax exemptions for nonprofits in Namibia?
The various types of nonprofits qualify for income tax exemptions including exemption from VAT. The law also makes allowance for substantial custom duty rebates. However, the requirement for some exemptions such as the custom duty rebates can be quite stringent.
Also, Namibia has very few companies not-for-profit. A large number of formal NGOs are registered as trusts as their registration processes are easier and cheaper.
The various types of nonprofits in Namibia generally lack substantial income generated internally. There is also inadequate donor funding to support institutional programs. Shortage of funds remains a major impediment to the growth of several nonprofits in the country. This in turn has created difficulty in the payment of salaries as well as other operational expenses.
Hence, there is a need for government to create more means to provide direct funding to sustain and preserve the existence of nonprofits in the country. This is most especially for active and transparent organizations that are serving the needs of the public.
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