Verified Facts
The tax rates in Botswana range from 5% to 25% for personal income, with a corporate tax rate of 22% and a value-added tax (VAT) rate of 12%, making it essential for expats and businesses to understand the tax system to navigate their obligations effectively.
Tax laws change frequently. Always consult a qualified tax professional for advice specific to your situation. This is a general guide only.
Quick Facts
Tax System Overview
Botswana has a territorial taxation system, meaning that individuals and companies are taxed on their income earned within the country, regardless of their residency status. However, residents are also subject to tax on their worldwide income, with foreign-sourced income being taxable in Botswana. To be considered a resident for tax purposes, an individual must have a permanent home in Botswana, be physically present in the country for at least 183 days in a tax year, or have been a resident in the previous tax year.
The tax system in Botswana is administered by the Botswana Unified Revenue Service (BURS), which is responsible for collecting taxes, customs, and excise duties. The tax year in Botswana runs from January to December, and taxpayers are required to file their tax returns by the end of June following the end of the tax year. Botswana has a relatively straightforward tax system, with a range of tax incentives and exemptions available to encourage investment and economic growth.
Personal Income Tax
| Income Bracket (BWP) | Tax Rate |
|---|---|
| 0 - 36,000 | 5% |
| 36,001 - 72,000 | 10% |
| 72,001 - 108,000 | 15% |
| 108,001 - 144,000 | 20% |
| 144,001 and above | 25% |
| Individuals in Botswana are entitled to various deductions and allowances, including a personal allowance, a dependent allowance, and a housing allowance. Taxpayers are required to file their tax returns electronically, and payment of taxes can be made online or through authorized banks. It is essential for individuals to keep accurate records of their income and expenses, as these may be required to support their tax returns. |
Corporate & Business Tax
- The corporate tax rate in Botswana is 22%, which applies to both resident and non-resident companies.
- Small business incentives are available, including a reduced tax rate of 15% for companies with an annual turnover of less than BWP 500,000.
- Botswana has several free zones, including the Botswana Innovation Hub and the Lobatse Industrial Estate, which offer tax exemptions and other incentives to businesses operating within these zones.
- Companies are required to register with the BURS and obtain a tax clearance certificate before commencing business operations.
- Companies must also file annual tax returns and pay taxes on their profits, with the tax year ending on December 31.
VAT / Sales Tax
- The standard VAT rate in Botswana is 12%, which applies to most goods and services.
- A reduced VAT rate of 5% applies to certain basic commodities, such as food, water, and electricity.
- Exemptions from VAT are available for certain goods and services, including medical services, educational services, and financial services.
- A tourist refund scheme is in place, allowing international tourists to claim a refund of VAT paid on goods purchased in Botswana.
For Expats & Foreign Workers
- Tax residency rules apply to individuals who are physically present in Botswana for at least 183 days in a tax year.
- Botswana has double taxation treaties with 14 countries, including South Africa, the United Kingdom, and Australia, to prevent double taxation of income.
- Social security contributions are not mandatory for foreign workers, but they may be required to contribute to a private pension fund.
- Remittance rules apply to foreign workers, who are required to remit their salaries to a bank account in Botswana.
- Expats and foreign workers may be entitled to tax credits for taxes paid in their home country, which can be offset against their tax liability in Botswana.
- It is essential for expats and foreign workers to consult a tax professional to ensure they comply with all tax requirements and take advantage of available tax incentives.
Crypto & Investment Income
- Investment income, including dividends, interest, and rent, is subject to tax in Botswana.
- Dividends received by residents are subject to a withholding tax of 7.5%, which can be reduced to 5% if the dividend is paid to a resident company.
- Cryptocurrency is not specifically regulated in Botswana, but it is subject to the same tax rules as other investments, with gains on disposal being subject to capital gains tax.
- Capital gains tax applies to the disposal of assets, including shares, property, and investments, with the tax rate being 25% for residents and non-residents.