12 Aug 2013

It will be inequitable to exempt first time home buyers from Value Added Tax (VAT), while those building houses for the first time will not benefit from the same dispensation, finance and development planning minister, Mr Kenneth Matambo, has argued.

“It would not be administratively possible to exempt VAT on housing material such as cement, bricks, window frames, etcetera for those who construct their houses, because prices are VAT inclusive,” he added.

Responding to a question in parliament from Boteti North MP, Mr Slumber Tsogwane, Mr Matambo also explained that the scheme would be difficult to administer since it would require sellers of houses, as well as those who sell building materials to identify first time home buyers.

The process of identifying first time home owners, he said would end up committing the resources of Botswana Unified Revenue Services (BURS) to an activity that does not assist BURS in the collection of revenue for the Government.

“And finally, the exemption of supplies would give rise to exemption creep; where exemption of one item creates direct pressure for further exemptions. I am however happy to indicate that my ministry is looking at options that can cushion first time home buyers and these options include exempting first time home owners from paying transfer duty,” he added.

Mr Tsogwane had wanted to know whether Mr Matambo was aware of government’s determination to exempt first time home owners from VAT on their first home purchase and why had this not been implemented. Ends