Southern African Development Community :: Botswana Indirect Taxes

A. Value Added Tax/Sales Tax (National Government)

1. Name of Tax, Levied in Terms of Which Act (Name, Number and Year)

Value Added Tax, Value Added Tax Act, Chapter 50:03 2000 Act No 1 of 2001.

2. Organisation Responsible for Administration

Botswana Unified Revenue Service hereinafter referred to as BURS headed by the Commissioner General.

3. Taxpayer

Under s7 VAT is levied on every taxable supply made by a registered person, and every import of goods or services by any person, other than an exempt import.

A person is defined in s2 and includes the State, a local authority, board, natural person, trust, company and partnership.

A registered person is defined as a person registered or treated as such in the VAT Act.

Under s16:

Registration is compulsory for every person who at the end or beginning of any period of 12 months, makes or expect to make taxable supplies exceeding P500 000 is value;
A person who makes taxable supplies and not liable to be registered, may register voluntarily at the Commissioner General’s discretion.

4. Time When Tax is Levied

Under s8 the general time of supply rule is when an invoice for a supply is issued by the supplier, or when any payment for the supply is received, whichever is earlier.

There are specific times of supply rules for specific situations, for example, supplies between persons that are connected in relation to each other.

5. Included in Tax Base

Under s7:

Every taxable supply by a registered person in the course or furtherance of his taxable activity;
Every import of goods or import of services by any person, other than an exempt import.

6. Positive Rates

The Act provides for the following two rates:

Under s10(1) a zero rate; and
Under s7(1) a standard rate of 12%

There is no any other VAT rate in Botswana

7. List of Goods/Services at Zero Rates

Under s10 the following goods and services are subject to VAT at the zero rates:

Goods and services exported from Botswana;
International transport services;
Sale of a going between registered persons;
Sorghum or maize meal;
Goods or services supplied for the personal or official use of the President or any dependent member of the President's family; and
Petrol, diesel and illuminating paraffin.

The zero-rating does not apply in a case where the goods have been or will be re-imported to Botswana by the supplier.

A zero-rating implies that VAT at 0% is levied on supplies and consequently all VAT borne by the registered person for purposes of making such taxable supplies is claimable as an input tax deduction.

8. List of Goods/Services at Positive Rates Other Than Standard

Not applicable in Botswana.

9. List of Exemptions

Under s11 the following goods and services are exempt from VAT
Financial services;
Prescription drugs and services in a public medical facility;
Education services;
Accommodation supplied by the employer to the employee as a benefit of employment;
Leasehold land by way of lease;
Services to members of an association by the association;
Apply of any goods or services by the State, a local authority or an association not for gain
Certain imports are also exempt from VAT;
Residential rental
A supply of the following agricultural farming implements:

To be updated.

An exemption implies that the supplier does not levy VAT on the supply and consequently no input tax deduction in relation to the provision of such supplies is allowed.

10. Tax Period

There are two tax periods applicable to registered persons;

A period of 2 months for those with sales not exceeding P12 million per annum;
A period of 1 month for those with sales exceeding P12 million per annum.

11. Deferment Schemes/Special Schemes

Under s15 (6):

The Commissioner General may allow an importer to defer payment of VAT on imported goods up to 25 days after the end of the month of importation.

12. Beneficiary of Revenue

Botswana Government

B. Excise Taxes Alcohol (National Government)

1. Name of Tax Levied in Terms of Which Act (Name, Number and Year)

Excise duties, Customs and Excise Duty Act (Cap 50:01)

2. Organisation Responsible for Administration

Botswana Unified Revenue Service

3. Taxpayer

Importer/local manufacturer

4. Included in Tax Base

Excise duties apply to certain locally manufactured or imported goods. Relief from excise duty is granted where excisable products are exported. In addition, relief is granted in respect of certain manufacturing activities. This duty is levied as a specific duty on alcohol

5. Tax Rate (Tariff Heading, Description, Rate per Litre or per Litre of Absolute Alcohol)

Tariff item

Description (abbreviated)

Rate of duty

104.10

Malt beer

25.63 UA per litre of absolute alcohol

104.15.05

Sorghum beer

0.0782 UA per litre

104.15.80

Other fermented beverages (excluding sorghum beer)

2.752 UA per litre of absolute alcohol

104.15.40 104.15.70

Fortified still wine Sparkling wine

1.825 UA per litre 2.276 UA per litre

104.15.10

Unfortified still wine

0.807 UA per litre

104.15.50

Other still fermented beverages, unfortified

1.305 UA per litre

104.15.60

Other still fermented beverages, fortified

2.314 UA per litre

104.20.10

Wine spirits manufactured in Botswana by the distillation of wine

36.71 UA per litre of absolute alcohol

104.20.15

Spirits manufactured in Botswana by the distillation of any sugar cane product

36.71 UA per litre of absolute alcohol

104.20.25

Spirits manufactured in Botswana by the distillation of any grain product

36.71 UA per litre of absolute alcohol

104.20.29

Other spirits manufactured in Botswana

36.71 UA per litre of absolute alcohol

104.20.60

Imported spirits of any nature

35.75 UA per litre of absolute alcohol or 15.37 UA per litre

104.20.70

Spirits of whatever nature in imported liqueurs, cordials and similar spirituous beverages

35.75 UA per litre of absolute alcohol

Note: Alcoholic Fruit Beverages (AFB’s) and ciders are charged at the rate applicable to ‘other still fermented unfortified Spirit coolers are charged at the rate applicable to spirits.

6. Rebates

The duty is intended to tax potable (i.e. for human consumption) alcohol. Alcohol used for other purposes such as intermediate products used in manufacturing or for medical purposes, is not intended to fall within the scope of the duty. However to protect the revenue, all alcohols are liable to duty and rebates are given for non-potable alcohol used for approved purposes. Denaturants are added to alcohol intended for commercial purposes to deter illicit consumption.

7. Beneficiary of Revenue

National Government, which forms part of the SACU customs pool.

C. Excise Taxes Tobacco Products (National Government)

1. Name of Tax Levied in Terms of Which Act (Name, Number and Year)

Excise duties, Customs and Excise Duty Act (Cap 50.01)

2. Organisation Responsible for Administration

Botswana Unified Revenue Service

3. Taxpayer

Importer/local manufacturer

4. Included in Tax Base

Excise duties apply to certain imported or locally manufactured products. Relief from excise duty is granted where excisable products are exported.

5. Tax Rate (Tariff Heading, Description, Rate per Kilogramme, or per 10 cigarettes/Cigars)

Tariff item

Description

Rate of duty

104.30.20

Cigarettes

1.754 UA per 10 cigarettes

104.35.10

Cigarette tobacco (hand rolling)

102.97 UA per kilogram net

104.30.10

Cigars

766.70 UA per kilogram net

104.35.20

Pipe tobacco

52.51 UA per kilogram net

6. Rebates

None

7. Beneficiary of Revenue

National Government, which forms part of the SACU customs pool

D. Excise Taxes Fuel/Hydrocarbon Oils (National Government)

1. Name of Tax Levied in Terms of Which Act (Name, Number and Year)

Excise duties, Customs and Excise Duty Act (Cap 50.01)

2. Organisation Responsible for Administration

BURS

3. Taxpayer

Distributor

4. Included in Tax Base

Excise duties apply to imported or locally manufactured products. Relief from excise duty is granted where excisable products are exported. In addition, relief is granted in respect of products used in farming and forestry activities.

5. Tax Rate (Rate of Duty Per Litre, Total Tax Burden as a Percentage of Retail Price)

Leaded petrol

Unleaded petrol

Diesel

Excise duty rate:

0.039 UA per litre

0.038 UA per litre

Motor Vehicle Accident Fund Levy

9.5 thebe per litre

National Petroleum Fund Levy

0.003 thebe per litre

Total tax element

9.5265 thebe per litre

9.5259 thebe per litre

Retail price

233 thebe per litre

215 thebe per litre

Taxes as percentage of retail price

4.09%

4.43%

Note:

Exchange rate used: 1 UA = 0.6035 PULA

6. Rebates/Concessions/Special Schemes

A rebate scheme is in place to allow some exceptions including farmers involved in primary production.

7. Beneficiary of Revenue

National Government

E. Excise Taxes - Non Alcoholic Bevarages/Other (National Government)

1. Name of Tax Levied in Terms of Which Act (Name, Number and Year)

Excise duties, Customs and Excise duty Act (Cap 50:01)

2. Department Responsible for Administration

Department of Customs and Excise

3. Taxpayer

Importer/local manufacturer

4. Included in Tax Base

Waters including natural or artificial mineral waters and aerated waters, not containing added sugar or other sweetening matter nor flavoured: ice and snow waters including mineral waters, containing added sugar or other sweetening matter or flavoured and other non-alcoholic beverages (excluding fruit or vegetable juices of heading 20.09).

5. Tax Rate (Tariff Heading, Rate per Litre, or per Kilogramme, or per Unit)

The duty has been cancelled effective from April 2002

6. Rebates

None

7. Beneficiary of Revenue

National Government, which forms part of the SACU customs pool.

F. Excise Duty on Luxury Goods - Ad Valorem (National Government)

1. Name of Tax Levied in Terms of Which Act (Name, Number and Year)

Ad valorem excise duty, Customs and Excise Duty Act (Cap 50:01)

2. Department Responsible for Administration

Department of Customs and Excise

3. Taxpayer

The importer/local manufacturer

4. Included in Tax Base

Excise duty is an ad valorem duty on luxury goods such as motor vehicles, cosmetics, computers, televisions, and audio equipment. The duty is chargeable on the value of “finished” goods from the local manufacturer. On imported goods this duty is levied on the customs value plus a 15% upliftment and inclusive of other duties.

5. Tax Rate

Gaming machines, photocopying equipment, printing, vending and office machines (including computers, fax, machines and modems) and TV sets	5%
Motorcycles (200-800cc)	5%
Clocks, firearms, motorcycles (greater than 800cc), photographic film	7%
Hair care products, perfumes, skincare products, cosmetics and toiletries	7%
Video equipment, hi-fi equipment, optical lenses, photographic/cinematographic equipment, pre-recorded tapes and compact discs	7%
Motor vehicles (sliding scale)	Max 20%

6. Special Methods (to deal with the specific needs of some industries)

Where the value of the finished goods is not readily determinable, reductions from the wholesale or retail price are calculated based on an agreed ‘value determination’ process to establish a fair taxable value. For the motor industry a special formula to take care of the variety of products is in place.

7. Beneficiary of Revenue

National Government which forms part of the Southern African Customs Union (SACU) customs pool.

G. Excise Duty on Other Goods (National Government)

1. Name of Tax Levied in Terms of Which Act (Name, Number and Year)

2. Department Responsible for Administration

3. Taxpayer

4. Included in Tax Base

5. Tax Rate (specify ad valorem or specific)

6. Special Methods (to deal with the specific needs of some industries)

7. Beneficiary of Revenue

H. Air Passenger Duty/ Departure Tax (National Government)

1. Name of Tax Levied in Terms of Which Act (Name, Number and Year)

Civil Aviation Cap 71:01 1977

2. Department Responsible for Administration

The Tax is collected by operators (Airlines) and agents (those acting on behalf of operators) whom are required to then pay over to the Government.

3. Taxpayer

Passengers on international flights and those travelling within Botswana.

4. Included in Tax Base

A tax of P25 per fee-paying passenger departing in international flights and P10 per passenger travelling within Botswana.

5. Tax Rate

A tax of P25 per fee-paying passenger departing in international flights and P10 per passenger travelling within Botswana.

6. Exemptions

Children under five years old.

7. Beneficiary of Revenue

Central Government.

I. Financial Transaction Taxes/Stamp Duty (National Government)

1. Name of Tax and Levied in Terms of Which Act (Name, Number and Year

No stamp Duty Tax

2. Department Responsible for Administration

3. Taxpayer

4. Included in Tax Base

5. Tax Rate

6. Exemptions

7. Beneficiary of Revenue

J. Payroll Taxes/Social Security Taxes (National Government)

1. Name of Tax and Levied in Terms of Which Act (Name, Number and Year

None

2. Department Responsible for Administration

None

3. Taxpayer

None

4. Included in Tax Base

None

5. Tax Rate

None

6. Exemptions

None

7. Beneficiary of Revenue

None

K. Other Taxes (National Government)

1. Name of Tax and Levied in Terms of Which Act (Name, Number and Year)

Transfer Duty, Transfer Duty Act (Cap 53:01) 10 of 1976.

2. Department Responsible for Administration

Registrar of Deeds under the Attorney General’s Chambers Office of the President

3. Taxpayer

Under section 2:

Purchaser upon the value of any immovable property, whether freehold or held from Government upon quitrent or other leasehold tenure, sold or otherwise alienated or transferred.

Every person becoming entitled to any such property by way of exchange, donation, legacy, testamentary or other inheritance or in any manner otherwise than through the medium or by means of purchase and sale.

Every person into whose name any such property registered in the Deeds Registrar in the name of any other person is to be registered or transferred.

4. Included in Tax Base

The purchase price or value of any immovable properly, whether freehold or held from government upon quitrent or other leasehold tenure sold or otherwise alienated or transferred. It is payable by every person who becomes entitled to any immovable property by way of exchange, donation, legacy, testamentary or other inheritances or any manner otherwise than through the medium or by means of purchase and sale.

5. Tax Rate

Property other than agricultural land 5%
Agricultural land
Citizen 5%
Non citizen 30%

Agricultural land means any land other than land in a township, used or capable of being used for the purposes of agriculture or horticulture or for breeding or keeping domestic animals, poultry or bees.

A “citizen of Botswana “includes a company incorporated in Botswana and of which a majority of every class of every class of equity shares is held by citizens Botswana. The rate of tax for citizens is 5 percent of the value over P20,000.

6. Exemptions/Rebates/Deferments/Special Schemes

The following are exempt from transfer duty s20:

Descendant of any person who would become the heir or one of the heirs;
The surviving spouse who was married in community of property is not changeable to duty upon any purchase or other mode of taking over, from and out of the joint estate of the deceased.
Removal of property held in trust from the name of the trustee to that of the other person who is entitled to have it so removed;
Any transfer of immovable property vested in trustees by husband or intended husband, or wife or intended, or the parent of the husband or wife or parent of intended husband or wife, for the purpose of making provision for the support of the marriage;
In every case of voluntary or compulsory position between joint owners of immovable property, all change in the Deeds office relating to the transaction will not attract transfer duty;
Any transaction in respect of which transfer duty has been waived by the President;
A citizen of Botswana is not liable to duty on the first P20 000 of the value of the estate as interest in question in the property concerned; and
Transaction regarding an insolvent estate.

There is an exempt threshold of P20,000 for citizens.

7. Beneficiary of Revenue

Central Government

L. Other Taxes 2 (National Government)

1. Name of Tax and Levied in Terms of Which Act (Name, Number and Year)

Business Licence Fees, Trade and Liquor Act (Cap 43:02) 29 of 1986.

2. Department Responsible for Administration

Department of Trade and Consumer Affairs.

3. Taxpayer

Any person carrying on trade or business (section 7)

4. Included in Tax Base

An application for a licence is made in the prescribed form and tendered with the fee for publication to the national Licensing Authority or to the licensing authority of the area in which the applicant proposes to carry on his or her trade or business.

5. Tax Rate

The Trade and Liquor Regulations list the fees, which range from P5 per hour for extension of liquor hours to P200 per annum for a Bar Liquor Licence.

6. Exemptions/Rebates/Deferments/Special Schemes

The Act does not specify any exemptions or rebates

7. Beneficiary of Revenue

Central Government