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Home Economy Botswana plans to broaden tax base

Botswana plans to broaden tax base

by Kingsley Chiahemen
0 comment 1 minutes read

Botswana finance minister, Thapelo Matsheka, has announced government’s intention to broaden the domestic revenue base to compliment the external sources of fiscal revenue.

Presenting the annual budget on Monday, the minister said the move will help government achieve its goal of fiscal stability.

The minister said for the financial year 2021/22, a deficit is anticipated which is expected to be financed through the issuance of domestic government securities and external borrowing.

“Achieving fiscal sustainability requires a range of actions, such as: improving domestic revenue mobilisation, trimming government spending to align it with the new, lower level of government revenues, making sure that government spending is productive and efficient; rebuilding the financial buffers that have been largely depleted; and ensuring that the borrowing necessary to finance budget deficits is kept to modest levels,” said Matsheka.

In order to broaden the domestic revenue base, the rate of value added tax (VAT) will be increased from 12 per cent to 14 per cent with effect from the 1st April 2021.

Currently, Botswana has one of the lowest VAT rates in the world, and in the SADC region.

Some of the measures to prop up the country’s finances include proposed fuel levy to be increased and withholding tax on local dividends to be increased from 7.5 per cent to 10% with effect from 1 April, 2021, coupled with an increase in the minimum taxable threshold for individuals. (PANA/NAN)

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