Botswana To Review Tax Legislation And Tighten Compliance

by Robert Lee, Tax-News.com, London

11 February 2005

Botswana’s government is to undertake a review of the nation’s income tax legislation in an effort to consolidate and clarify recent changes in tax laws, Minister of Finance and Development Planning, Baledzi Gaolathe announced in the 2005/6 budget presentation.

According to Gaolathe, the review, which has come about as a result of continued tax compliance problems, will take place later in the year, with a view to a new consolidated Income Tax Bill being presented to parliament in 2006.

Presently, about 70% of income tax returns are filed on time, but the government has set a target of 90% compliance with the filing deadline during the next financial year. Moreover, Gaolathe stated that a substantial proportion of taxpayers fail to make payments after submitting their returns, adding that problems of under-reporting have also been noted in the VAT system.

"Although the filing of income tax returns on time has improved over the last three years following the introduction of the self-assessment system for corporate taxpayers, there is room for improvement," he noted.

The Botswana Unified Revenue Service (BURS) plans to tackle the problem through an intensification of its income tax audit programme and the imposition of more fines for non-compliant taxpayers.

“Stern action has to be taken against those who fail to comply with the tax law in fairness to tax payers who comply fully," Gaolathe warned.

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