On 1st February 2021, Botswana’s Minister of Finance & Development Dr. Thapelo Matsheka, presented the 2021 Botswana Budget to Parliament.
These are the highlights of the Botswana budget for 2021/2022.
With effect as from 1st April 2021, the VAT rate will increase from 12% to 14%.
2. WHT on Dividends
With effect as from 1st July 2021, the WHT rate on dividend will be increased from 7.5% to 10%.
3. Fuel Levy
With effect as from 1st April 2021, the fuel levy will be raised by BWP 1 per litre to compensate for zero-rated fuel for VAT purposes.
4. Income Threshold
With effect as from 1st July 2021, the minimum income tax threshold for individuals will be increased from BWP 36,000 per year to BWP 48,000 per year. This means an increase of BWP 4000 per month.
5. Tax Amnesty
To ease the burden on taxpayers, the 2021/2022 budget provides that a tax amnesty will be offered during the coming tax year. Taxpayers with outstanding tax amounts will be granted an opportunity to clear the principal amount owed in exchange for write off of interests and penalties charged during the previous tax periods without fear of prosecution.
6. Levy on Sweetened Beverages
To decrease sugar consumption, a levy on sweetened beverages will be introduced during the year at a proposed rate of 2% thebe per gram of sugar above the content of 4g of sugar per 100 millilitres.
7. Levy on Plastic Bag
To decrease the usage of plastic bags, a levy will be introduced during the year. It is to be noted that this levy was introduced previously but was never implemented.
8. Levy on Second-Hand Vehicles
With dual objectives of raising revenue and addressing environmental concerns regarding pollution, the budget provides that the government is working on the modalities of imposing a levy on second-hand vehicles imported into Botswana.