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Tax – an overview

Tax – an overview. Nigel Dixon-Warren. Introduction. Does Botswana need tax? Government revenues* (31/03/09 = P30bn): Income Tax ( incl CTT ) P8bn (26.7%) VAT P4.25bn (14.2%) Customs P7.75bn (25.8%) Mineral royalties & Divs P6.7bn (22.3%) Divs from parastatals ** P1.4bn (4.7%)

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Tax – an overview

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  1. Tax – an overview Nigel Dixon-Warren

  2. Introduction • Does Botswana need tax? • Government revenues* (31/03/09 = P30bn): • Income Tax (inclCTT) P8bn (26.7%) • VAT P4.25bn (14.2%) • Customs P7.75bn (25.8%) • Mineral royalties & Divs P6.7bn (22.3%) • Divs from parastatals** P1.4bn (4.7%) • Everybody else P1.9bn (6.3%) *excludes sales of bonds and treasury bills of P1.95bn ** includes Bank of Botswana P1.3bn

  3. Sources of tax revenue • Income Tax including; • Withholding Tax (PAYE) • Other Withholding Tax • Capital Gains Tax • Capital Transfer Tax • Value Added Tax • Customs & Excise (CCU)

  4. But what about.... • Alcohol levy • Fuel levies • Transfer duty • Training levy • ....any revenue raising legislation which has a provision allowing for transfer to the consolidated fund...

  5. Direct Taxes • Income Tax • Historically Botswana was source based (as opposed to residence / worldwide based) • Current scenario: • Companies – worldwide income • Individuals (expatriate) – source • Individuals (citizens) – worldwide • Where to from here...? • Challenges (and opportunities) – lack of Board of Adjudicator / High Court Decisions • Botswana is a “fertile” country for tax interpretation

  6. Indirect Taxes • VAT commenced in July 2002 – based on “best practice” internationally • Classic “input / output” system – resulting in consumer bearing the tax • Self assessment system

  7. The future... • Anyone in receipt of income must register and submit tax returns; • Lifestyle audits; • Cross-referencing of information; • Simplified tax system?

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