“In the Production of Income” or Just a Bad Deduction? The Test That Decides

Many expenses look deductible. Many are not.
One weak deduction can trigger a NamRA adjustment that unravels an entire return.

Date:

16 March, 2026

Time:

14:00

Hours:

1 hour

CPD Units:

Category:

Taxation

Group:

Namibia CPD

Format:

Webinar

“In the Production of Income” or Just a Bad Deduction? The Test That Decides

R345,00 VAT incl.

Product Information

Deductible expenses sit at the centre of almost every tax return. Yet the rule that governs them is often misunderstood. For an expense to qualify, it must have a clear and direct connection to the production of income. If that link is weak, the deduction fails. Tax authorities focus heavily on this test during audits because it reveals inflated or incorrectly classified expenses. Many costs appear business related but lack the required connection to income generation. When that happens, the deduction is denied and the tax exposure grows quickly. For practitioners advising SMEs, careful judgment is essential. Understanding how the connection between an expense and income is evaluated helps prevent adjustments, protects the integrity of the return, and reduces the risk of disputes with the tax authority.

Presenter/s

Johan Nel

Is a seasoned tax leader and operational strategist with over a decade of experience in financial management and tax leadership. His career was shaped at PwC Namibia, where he led key strategic initiatives aligned with corporate objectives and cultivated high-performing, quality-driven teams.

What will set you apart

The real meaning of “in the production of income” in tax law
The practical application of the close connection test
How to separate genuine business expenses from non-deductible costs
Warning signs that a deduction will fail under audit
Why some expenses that feel business-related are still rejected
How to structure SME expenses so they remain defensible
The documentation that strengthens the deductibility of an expense
How incorrect deductions expose practitioners to professional risk

Event breakdown

The legal meaning of “in the production of income”
The close connection test explained in practical terms
Revenue expenses versus non-deductible expenditure
Why some business expenses fail the deductibility test
Common SME deductions that attract scrutiny
How NamRA evaluates expense claims during audits
The importance of commercial purpose in deductions
Documentation required to support expense claims
Practical checks before allowing a deduction
Protecting tax returns from avoidable audit adjustments

Certificate

The following event is awarded 1 CPD unit.