16 Jul 2015

The Minister of Finance and Development Planning, Mr Kenneth Matambo has said government abolished exchange controls in 1999.

Responding to a question from Nata/Gweta MP, Mr Matambo said government could not therefore impose any levies on capital flows or the management of such flows. That, he said was in line with other countries that had fully liberalised their exchange controls.

The minister said government did not deem it necessary to introduce additional levies on repatriation of profits or externalisation of dividends as there were other existing taxes.

He said corporate tax stands at 22 per cent of profits and withholding tax on dividends of 7.5 per cent. The minister said therefore there was no need for additional levies as businesses had to retain part of their profits to finance their operations. “

This is consistent with the objective of ensuring that Botswana continues to attract foreign direct investment and support capital market development,” he said. Nata/Gweta MP, Mr Polson Majaga had asked the minister whether Botswana’s exchange control regulations had an exit levy when one repatriates their money.

Mr Majaga wanted to know the percentage charged and whether the minister did not deem it necessary to introduce such a levy as a mechanism to raise the revenue and better Botswana’s capital flows management as well as modernize the exchange controls regulatory framework in line with international best practice.  ENDS