In his 2017 budget speech delivered in February of that year, Finance and Economic Development, Kenneth Matambo admitted that Botswana’s relatively narrow revenue base, largely confined to mineral and Customs and Excise, provides a challenge about the extent to which the country can expand the scope of its economic diversification and export-led growth.
As he takes over the podium in tomorrow’s budget, key question that tax payers asks themselves is whether Matambo will make pronouncement relating to tax administration.
“With mineral revenues declining and those from SACU being volatile, there is therefore an urgent need to diversify our revenue base towards more sustainable and reliable sources. To this end, my Ministry is considering proposals by the Taxation Review Committee of how to diversify the Government revenue base. These proposals include; adjusting various taxes, levies, permits and licences and reviewing some tax expenditures such as VAT exemptions”, Matambo said in February 2017.
Already the International Monetary Fund (IMF) has called on him to accelerate the planned tax revenue reforms. Hardly three months after the 2017 budget speech, the IMF team which visited the capital Gaborone and met with Matambo amongst other policy makers at the government enclave said 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.
The IMF says the fiscal profile is predicated on the authorities’ intention to increase tax revenues and slowdown the pace of spending on wages and salaries and on transfers to state-owned enterprises.
“In this connection, 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”, reads part of the statement released by the IMF this week.