30 Mar 2023

The proposed Value Added Tax (VAT) Amendment Bill of 2023 has received overwhelming support across the political divide in Parliament.

Debating the Bill tabled by the Finance Minister, Ms Peggy Serame on Monday, legislators hailed the amendments as a necessary tool to help Batswana overcome the consequences of the current economic challenges.

They said the bill would as well help Batswana afford medical services as the VAT exemption would be extended to private medical health services.

In his contribution, the Minister for State President, and also the Member of Parliament for Molepolole South, Mr Kabo Morwaeng said that the amendment shows that ‘we are a listening and understanding government, alive to the challenges faced by ordinary people’. These amendments he said would also help boost the household economy,” he said.

Mr Morwaeng said the move was an indication that government did not want to leave any Motswana behind in terms of poverty emancipation.

Also contributing to the debate, the MP for Selebi Phikwe West, Mr Dithapelo Keorapetse, who is also the Leader of Opposition applauded the amendments, but said that government should improve its tax collection in order to reduce tax on ordinary people.

“Botswana can have one of the lowest VAT rates if she could intensify her revenue collection to finance developments. Billions of Pula are lost in uncollected revenue,” he said.

MP Keorapetse advised government to look into collecting royalties from mining companies and guard against repatriation of profits by foreign companies operating in the country.

The Kanye North legislator, Mr Thapelo Letsholo also appreciated the proposed amendments and called for the extension of coverage to private medical service providers to reduce congestion at public health facilities.

“We have seen even people with medical aid going to public facilities because they could still not afford the costs. 

The extension will prevent double dipping where those covered by medical aid through government subsidies still enjoyed assistance at government facilities almost free of charge,” he said.

Supporting the Bill, MP for Maun West, Mr Dumelang Saleshando said it was what the opposition had long called for.

He said that VAT exemption was one way of cushioning ordinary people against poverty and urged government to consider extending the list of exempted items to school stationery, which he said was hardly available in government schools, thereby forcing parents to pay from their pockets.

The Goodhope/Mabule legislator, who is also the Minister of Transport and Public Works, Mr Eric Molale equally applauded the proposed amendments, especially on its extension to small agricultural implements like forage machines. 

“Agriculture is the backbone of most people, so this will help improve the agricultural sector, especially the communal farmers who could not afford to buy large machinery,” he said. 

Although he supported the Bill, the MP for Ngami, Mr Cartepillar Hikuama urged government to ensure that such amendment went even beyond the coming general elections so that it would not be viewed just as a campaign strategy.

 “I would also plead with government to extent the exemption to animal vaccines and feeds,” he said.

Responding to the parliamentarians’ contributions, Minister Serame assured them that thorough monitoring would be done to ensure that VAT was not added on exempted and zero rated items by traders and suppliers.

“Punitive measures will be taken against those suppliers and traders who are found to add VAT unnecessarily,” she said.

Ms Serame said, “The fact that I have not mentioned other items like water and electricity is because they were already covered. 

This is just an amendment to cover other necessary items that were not covered in the Act.”

She also allayed fears raised by MPs that VAT exemption on medical services might disadvantage private practitioners who buy supplies outside the country, where VAT exemption laws did not apply, yet they were not allowed to charge VAT to their clients.

“After the publishing of the Bill on the government gazette, they approached me with those fears, but I assure you as I assured them that their concerns will be looked into,” she said.

Ms Serame also assured the House that the list of items zero rated and tax exempted would continue to be reviewed and revised when necessary.

The Bill has passed the second reading and will now go to the committee stage. ENDS