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Botswana: Domestic Corporate Taxation

Introduction

This page was last updated on 8 May 2019.

See International Financial Services Centre for details of the privileged tax regime introduced in 1999 for international companies.

Value added tax was introduced in 2002 at a standard rate of 10%, replacing general sales tax. As a result of the April 2010 budget, the VAT rate was increased to 12% and the registration threshold rose from BWP250,000 to BWP500,000. Since then, the VAT rate has remained the same. In 2015, certain basic foodstuffs became zero-rated and the registration threshold was increased to BWP1 million.

In July 2004, Botswana's Finance and Development Planning Minister, Baledzi Gaolathe announced changes aimed at broadening the tax base, limiting exemptions and promoting compliance to raise an estimated BWP50 million (USD10.8 million). Among the measures were limitations to exemptions on the disposal of shares, limitations on the deductions for lease payments for the use of motor cars, and restrictions on deductions for farming losses.

In July 2010, the standard corporate tax rate for resident companies was reduced to 22% and a new 15% reduced rate was introduced. The reduced rate applies to companies designated as manufacturing and International Financial Services Centre-registered; they also have with a final 7.5% withholding tax on dividend distributions. The corporation tax rate for non-resident companies was increased to 30%.

In 2016 the Botswana Telecommunications Corporation Limited (BTCL)  was privatised. In 2017, five more parastatals were earmarked for privatisation: Air Botswana, Botswana Meat Commission, Botswana Railways, National Development Bank and Botswana Agricultural Marketing Board.

 

 

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