Thursday, July 18, 2024

Botswana readies for new tax regime

While no time frame has been announced yet, Botswana will at some point, in the near future certainly operate under a reformed tax regime. This became clear at the just ended general assembly of the African Tax Administration Forum (ATAF) which was hosted by Botswana Unified Revenue Service (BURS) in the capital Gaborone this past week.

Finance and Economic Development Minister Kenneth Matambo, during his address said that Botswana is working on reforms to improve the tax landscape, as the country is concerned about its narrow domestic revenue base.

“This overarching tax administration law will result in the consequential amendments to other revenue laws such as the income tax and the value added tax acts to synchronise and harmonise them.”, Matambo said.

It is not the first Matambo mentions the imminent changes in tax laws as he first did in his 2017 budget speech when he announced that the government is considering proposals by the Taxation Review Committee of how to diversify the Government revenue base. At the time, Matambo said the proposals included adjusting various taxes, levies, permits and licences and reviewing some tax expenditures such as VAT exemptions.

On the other hand, the International Monetary Fund (IMF) has been breathing heavily on the neck of the Botswana government to pass into law and implement the new Tax Administration Act.

The IMF team on the other also says that domestic revenue mobilization will provide Botswana with added funding for development spending and help protect buffers.

In addition, IMF says it would be important for Botswana to consider streamlining VAT exemptions, simplifying the personal income tax, and accelerating plans to register and re-evaluate properties. 

The Fund has in the past indicated that Botswana’s tax revenue reforms need to be accelerated to protect public finances against any adverse developments and maintain the country’s track record of sound fiscal management.


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