10 Aug 2022

Minister of Finance, Ms Peggy Serame has tabled a bill that seeks to exempt Special Economic Zones (SEZS) licensed businesses from payment of transfer duty on immovable properties.

Presenting the Transfer Duty (Amendment) Bill 2022 for second reading in Parliament on Monday, Ms Serame said it aimed to improve on fiscal measures by facilitating transfers of immovable property within Special Economic Zones.

She said the bill proposed exemption from payment of transfer duty on all transactions involving acquisition of immovable property by persons licensed to carry out business under the Special Economic Zones Act (SEZA).

“Clause two of the bill amends the Transfer Duty Act in section 20 by inserting a paragraph which exempts from payment of transfer duty a person licensed to carry out business activity in a Special Economic Zone area when they purchase or acquire immovable property for the purpose of carrying out a Special Economic Zone registered business,” said the minister.

She added that the exemption included SEZs licensed developers who developed immovable property in SEZ areas for letting it out to SEZs businesses only.

She explained that the SEZs initiative was one of the strategies of attracting world class domestic and foreign investors.

“Among the targeted economic incentives provided to investors setting up within the Special Economic Zones are lower corporate tax of five per cent for the first 10 years of operation and 10 per cent thereafter,” said the minister.

Debating the bill, Palapye MP, Mr Onneetse Ramogapi said it was a step in the right direction in terms of promotion of investment on immovable properties by businesses operating in SEZ areas. He said serious investors usually wanted to have their own business properties.

Selebi Phikwe West MP, Mr Dithapelo Keorapetse also expressed support for the bill. He, however, urged the finance minister to ensure that businesses operating in the Selebi Phikwe Economic Development Unit (SPEDU) region benefitted from lower corporate taxes.

Mr Keorapetse, who is also Leader of Opposition, urged government to effect laws that ensured that products from those businesses accessed markets both from government and companies in the region.

“Some government departments in Selebi Phikwe still buy products from outside Phikwe even though they are produced by businesses operating in Phikwe. There are some companies in Phikwe that source things like concrete products from outside while they are manufactured in Phikwe,” said the legislator.

Kgalagadi North MP, Ms Talita Monnakgotla said changes proposed by the bill would make it easier for citizen owned businesses operating in SEZs areas to acquire immovable property.

Vice President, Mr Slumber Tsogwane said changes proposed by the bill would encourage economic diversification and growth. He also said the exemption would ensure the ability of Batswana businesses to operate in SEZS areas.

“It will help in the economic development of those areas and value chain development,” said the Vice President.

He urged the ministry to ensure that more citizen owned companies participated in business in SEZs to promote citizen economic development.

Although he supported the bill, Maun West MP, Mr Dumelang Saleshando, said it excluded poverty stricken areas around the country.

He said the exemption of transfer duty on immovable properties should cover all areas instead of focusing on SEZs areas only. He also said the steep payment of transfer duty negatively affected investment in immovable property in all areas around Botswana including Ngamiland. ENDs