24 Mar 2022

The current corporate income tax rate of 22 per cent complements other economic policies that promote a conducive environment for business while contributing to government revenues.

Responding to a parliamentary question recently, Minister of Finance and Economic Development, Ms Peggy Serame said tax rates, however, continued to be reviewed on a continuous basis to determine their appropriateness.

“It should be noted that as much as income tax is a fiscal tool, it is also an economic management instrument to promote growth and economic development.

As a fiscal tool, corporate income tax is indeed an important source of government revenue,” she explained.

However, she indicated that worldwide, countries used the rate of corporate income tax as part of their economic instruments to improve their ease of doing business environment as indicated in the World Bank Ease of Doing Business Report.

“It is for this reason that in determining Botswana’s rate of corporate income tax there is a need to balance between the two objectives of fiscal and economic development.

In setting the rate of corporate income tax in Botswana, consideration was made to the business environment in the country such as Botswana’s unfavourable geographical location,” Ms Serame said.

Furthermore, she said the approach of maintaining a relatively low rate of corporate tax was intended to maintain the country’s competitiveness for investment, both domestic and foreign.

That, she explained, was because the country was competing for Foreign Direct Investment with the rest of the world.

Selebi-Phikwe West MP, Mr Dithapelo Keorapetse had asked the minister to state how much had been raised from corporations in terms of corporate income tax for each of the three past financial years and the percentage contributions to total taxes.

Mr Keorapetse also asked the minister to explain why corporate income tax could not be raised from 22 to 30 per cent.

As such, the minister outlined the corporate income tax collections for the past three years as follows:
Corporate Income Tax (CIT) Collections - P’ million

Tax Year    CIT    Total Taxes    CIT as % of total taxes
2017/18    7 726    40 523    19.11%
2018/19    8 169    38 286    21.34%
2019/20    7 334    38 278    19.16%


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