11 Aug 2022

Parliament on Wednesday passed the Transfer Duty (Amendment) Bill 2022 to the committee stage.

The objective of the bill, which was tabled by finance minister Ms Peggy Serame on Monday, is to amend the Transfer Duty Act by exempting Special Economic Zones (SEZs) licensed business from payment of transfer duty on immovable properties.

Ms Serame had explained that  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).

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

Members of Parliament (MPs) expressed support for the bill. Moshupa MP, Mr Karabo Gare said the exemption proposed by the bill would help to improve the ease of doing business in SEZs areas. Mr Gare said Botswana was lagging behind in terms of the ease of doing business, which  made the country less attractive to investors.

“This is discouraging investors from coming to do businesses in our country. Investors usually consider costs of setting up business and the charging of transfer duty can render a project not viable or over-capitalised,” said the MP.

He argued that exemption of transfer duty would make SEZs areas attractive to investors. He urged the minister to extend the exemption to other businesses outside SEZs areas in order to promote economic diversification required by the country.

Gaborone North MP, Mr Mpho Balopi said the exemption proposed by the bill was a good move towards investment attraction. He said the 20 per cent transfer duty on immovable property which was charged foreign investors was too steep, and it discouraged foreign investment.

Francistown South MP, Mr Wynter Mmolotsi said the transfer duty rendered acquisition of property too expensive for foreign investors.

He welcomed the proposed exemption, pointing out that it would encourage investors to come into the country. Mr Mmolotsi urged the Ministry of Finance to extend the incentives to local businesses operating in other areas of the country. That, he said, would help local companies to grow and create more employment opportunities.

Francistown East MP, Mr Buti Billy said the exemption of transfer duty would encourage businesses to acquire properties in SEZs areas.

Nata/Gweta MP, Mr Polson Majaga said the passing of the bill would promote investment in SEZs areas since operating businesses required one to acquire infrastructure. ENDs