Botswana: Personal Taxation

In this section:

- Botswana Residence and Liability for Taxation
- Botswana Payroll Taxes
- Botswana Capital Taxes

Botswana Residence and Liability for Taxation

Resident citizens and generally any individual who is physically in Botswana for more than 183 days in any tax year is resident for tax purposes.

Both resident and non-resident individuals are liable for tax on Botswana-sourced income.

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Botswana Payroll Taxes

There is no distinction between unmarried and married individuals.

At the time of writing, the rates of tax are as follows:

Non resident individuals, trusts falling under section 14(2) of the Income Tax Act 1995 and the estates of deceased persons are taxed at the following rates:

Contributions to an approved pension or retirement annuity fund or scheme are deductible from chargeable income in ascertaining the taxable income of a resident individual. The deduction is restricted to 15% of non-investment income or the actual contribution, whichever is the lower.

Benefits in cash (traveling, entertainment, education etc.) and value of benefits in kind (housing, motor vehicle, furniture, utilities etc.) provided to an employee are taxable as employee's employment income.

Employers operate pay-as-you-earn schemes, under which the employer is obliged to deduct tax on all remuneration (including cash benefits) according to the Tax Table provided by the Commissioner; employers who have employees liable for tax and all companies must register with the Commissioner of Taxes.

Individuals whose taxable income does not exceed P25,000.00, and all employees the whole of whose income has been subjected to tax deduction under the PAYE scheme, need not furnish tax returns. Employees with other sources of income are required to submit tax returns.

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Botswana Capital Taxes

The income accruing from the disposal of a principal private residence will be exempt from tax if the proceeds are re-invested in another residential property within 24 months of the disposal of the principal private residence. However, if the disposal gains are not so reinvested within a period of 24 months, the exemption would be available only in respect of the most recent disposal of the principal private residence.

At the time of writing, the following rates apply:

In Botswana's 2006 budget, the law was amended to stipulate that any sale of shares held by a taxpayer in a company, where immovable property is the dominant underlying asset, will be deemed to be a sale of the underlying immovable property and will be taxed accordingly.

A capital transfer tax is levied on the donatee on the aggregate value of the gratuitous disposal of property and the distribution of property by way of inheritance (other than to one's spouse).

In the case of the disposal of assets of a deceased person, the first P100,000 is not liable.

At the time of writing, the rates of tax for a person other than a company are as follows:

For resident or non-resident companies, the rate of Capital Transfer Tax is 12.5%.

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