10 Jul 2019

The Minister of Finance and Economic Development, Mr Kenneth Matambo has presented to Parliament the second reading of the Transfer Duty (amendment) Bill, 2018.

Presenting the bill amendments, Mr Matambo said that the bill sought to amend the Transfer Duty Act (CAP 53;01) in order to address existing loopholes in the act and to make  necessary improvements due to the growth in the economy .

The proposed amendments, he said would also provide relief for deserving cases such as exempting first time home buyers from paying transfer duty and increase the threshold before payment of transfer duty by citizens as well as exempting payment of duty where property has to be transferred between divorcees following their divorce.

Minister Matambo said the  amendment of section two, clause three of the act  sought to extend the rate of duty of 30 per cent to be payable by persons that were not citizens in transactions involving transfer of land other than agricultural land as the rate was currently charged to non-citizens only for transactions involving agricultural land. “The act currently provides that the majority of every class of equity shares be held by citizens of Botswana, hence the clause seeks to amend the definition of citizen of Botswana, to include a company incorporated in Botswana of which the whole of its shareholding is owned by citizens of Botswana,” he said.

 He said  clause four would also amend section three with the aim to extend the payment of transfer duty in the transaction whereby transfer of shares in companies results in beneficial ownership of any immovable property.

 The act, he said currently provided for payment of transfer duty only in transactions where transfer of shares in companies resulted in beneficial ownership of agricultural land being passed from one person to another.

 He highlighted that the amendments would also provide that the transfer duty shall be payable within the 60 days of the assessment of the duty payable contrary to the current act which provided that the transfer duty was payable at the time of entering into an agreement for the purchase or other transfer of the property.

Mr Matambo said such  loopholes posed financial challenges to purchases of property in cases where actual transfer of property was deferred for reasons beyond the control of the person acquiring the property, such as where property was acquired through the Tenant Purchase Scheme.

Further, the Minister Matambo said the proposed amendments would also try to remove the requirement for spouses to be married in community of property for transfers of immovable property between them to be exempted from payment of transfer duty.  He said the amendments would replace the provision that exempts transactions that transfer immovable property from a wife married in community of property to her husband as the current provision was beneficial to husbands only.

Moreover, Mr Matambo said that amendments would also provide for exemption from duty when immovable property was transferred from one divorced spouse to another subsequent to their divorce.

Contributing to the debate, Serowe South legislator, Dr Pelonomi Venson-Moitoi applauded the minister for the proposed amendments highlighting that it would bring an end to the misery that divorced women had to go through as they could finally have entitlement to property they had accumulated during the marriage.

 She commended the minister for also increasing the amount that was exempt from transfer duty with respect to citizens for Botswana from current P200 000 to P500 00, a move which she said would guard against the sale of land to foreigners. ENDS