15 Apr 2021

Members of Parliament have welcomed the Income Tax (Amendment) Bill which seeks to among others increase the income tax threshold presented by the

Minister of Finance and Economic Planning, Dr Thapelo Matsheka on Wednesday.

Supporting the Bill, the Vice President and Boteti West MP Mr Slumber Tsogwane said it would be beneficial as it freed people from paying income tax.

Under the Bill, the threshold for income tax has been increased from an annual income of P36 000 to P48 000.

Mr Tsogwane further said it was important for employers especially the private sector to be trained about taxation, saying a number of them deducted taxes from their employees but the funds were never remitted to the Botswana Unified Revenue Services (BURS).

He further said filing tax returns was complicated and some people only learnt after many years that they owed tax.

Palapye Member of Parliament, Mr Onneetse Ramogapi said the increase of the threshold would cushion low income Batswana who were already impacted by the Value Added Tax (VAT increase.

He called upon the minister to regulate the tax advisors and suggested that severance benefits and savings should not be taxed.

For her part, Specially Elected MP Ms Beauty Manake said local businesses encountered high operational costs hence they offered low salaries to their employees.

She said the bulk of the population was within the P36 000 income bracket and therefore their exemption from tax would result with an increase in household spending.

This, she said, would have the ripple effect in the economy.

MP Sethabelo Modukanele of Lerala-Maunatlala said the increased disposable income would revive economic activity.

Lentsweletau-Mmopane legislator, Ms Nnaniki Makwinja said this was a welcomed development especially since people in the low income bracket were adversely affected by the effects of COVID-19 pandemic.

She further welcomed the increase of dividend tax from 7.5 to 10 per cent.

However, the MP was concerned about loopholes resulting in tax evasion and she requested BURS to be more vigilant as some funds were smuggled out of the country.

Jwaneng-Mabutsane MP, Mr Mephato Reatile was however concerned about lack of equitable distribution of developments although Batswana paid taxes.

He said people in the P36 000 income bracket were already affected by the newly introduced fuel levy and increased VAT.

Goodhope-Mabule legislator, Mr Eric Molale said people involved in the Small Micro and Medium Enterprises (SMMEs) stood to benefit from the gesture.

He also said there were inefficiencies in the collection of taxes; as some shops did not issue receipts and also did not have point of sales machines.

Gabane-Mmankgodi MP, Mr Kagiso Mmusi welcomed the Bill, saying it would benefit his constituents adding it would close the gap created by the 14 per cent VAT.

He also urged the minister to keep an eye on companies which might not want to pay tax from profits and dividend tax and would therefore falsify their books.

However, the MP said the increase of dividend tax would create a financial burden on Batswana who have invested in the Botswana Stock Exchange (BSE) listed companies.

Mr Mmusi further said government should tread carefully lest it lost investors to other countries with favourable tax climate.

Dr Lemogang Kwape of Kanye South said while it was imperative to reduce the tax burden on the low income group, the rich should be taxed more.

MP Ignatius Moswaane of Francistown South called upon the minister to close the gaps as the government continued to lose revenue due to inefficiencies in the tax collection system.

Majority of businesses owned by foreigners do not offer receipts and neither do they have point of sales (POS) machines hence it was unknown if the VAT was remitted to BURS, he added.

Meanwhile, MP Fidelis Molao of Shashe West said Batswana should be taught about how taxation affected developments and the services provided by government. ENDS