11 Jul 2019

Government should adopt a new taxation regime that will attract direct foreign invest, says Gaborone-Bonnington South MP Mr Ndaba Gaolathe.

 Contributing on the Transfer Duty (amendment) Bill debate in Parliament, Mr Gaolathe said that even though he agreed with the majority of the proposed amendments, government should however guard against potential economic repercussions of extending the rate of duty of 30 per cent to be payable by persons that were not citizens of Botswana in transactions involving transfer of land other than agricultural land.

 Mr Gaolathe said though the 30 per cent increase could  be significant, it could complicate the ease of doing business in the country, something that could defeat the country’s drive of attracting  direct foreign investment as it would escalate the cost of investing in Botswana.

He said extending foreigner’s rate of duty would affect any prospect of building a robust economy as it would adversely impact on the opportunities available to empower citizens’ property consortiums willing to partner with international companies.

 The Gaborone-Bonnington South legislator therefore pleaded with government to establish an enabling environment that would support the establishment of more multinational companies that could bring in revenue and foreign exchange to the country and ultimately create employment opportunities for the locals.

 Mr Gaolathe said there was need for citizens to co-invest with foreign companies since  multinational companies required a large number of skilled as well as unskilled employees to operate their activities, thus it provided employment opportunities to the people of host country, as a result economic standard of society would improve.

 He said the establishment of multinational companies would also assist in the transfer of capital and technology adding that multinational companies transfer investment, advance technology to developing countries through establishing branches and subsidiaries.

Such companies, he said would also increase government revenue since they were large scale business hence paid a large amount of duties, income tax and VAT to government.

Mmathethe/Molapowabojang MP, Dr Alfred Madigela also applauded the Minister of Finance and Economic Development for the proposed reforms with respect to the Transfer Duty (amendment) Bill saying the proposal of exempting first time home buyers from paying transfer home duty would encourage home ownership particularly the youth.

 He remained optimistic that the reforms would ease the process of acquiring mortgage rather than short term personal loans.

Gaborone Central MP, Dr Phenyo Butale said the Transfer Duty (amendment) Bill was composed of commendable clauses that signalled positive transformations in terms of ensuring economic growth and encouraging home ownership.

 However, he said the economic development of any country was dependent on its financial system which included its banks, stock markets, insurance sector, pension funds and a government-run central bank with authority hence government should strive to develop a robust financial system. ENDS