The report reveals that Botswana's tax structure is complex, while the compliance is very low.

"A review of the tax system is recommended focusing on the evaluation of creative alternatives, simplifications and the feasibility of a phased further lowering of both company and personal tax rates to remain competitive not only within the region, but especially with those of the world's major FDI destinations," the report reads in part.

However, the report affirms what the Minister for Finance and Development Planning, Baledzi Gaolathe said when he delivered his 2006/07-budget speech.

In his speech, Gaolathe admitted that company tax was unduly complicated. He said that company tax that is made up of 15 percent basic company tax rate, 10 percent additional tax and 15 percent withholding tax on dividends is complicated.

He then said that the tax regime would be simplified by adopting a single company tax.

"In this regard, I propose to simplify the tax system by adopting a single company tax rate and withholding tax on dividends as a final stage," he said.

However, the report does not mention the lower tax charged under the Botswana International Financial Services Centre (IFSC).

The IFSC is a home for lower tax to attract companies looking to venture into Africa.

Under the IFSC, there is a corporate tax rate of 15 percent until June 2020, exemption from the obligation to withhold taxes on dividends declared and the exemption from the obligation to withhold tax from payments in respect of interest, commercial royalty, management or consultancy fees to non-residents.

Instead, the BEAC report notes that the IFSC "has proved less successful than originally expected".

It said that the creation of a Financial Services Village with extended free zone privileges "may revitalise the IFSC venture". Meanwhile, in its annual report for 2006, the IFSC said that seven new companies were certified over the past year.

When fully operationally they will employ capital in excess of US$100 million (about P618 million) in the next three years.

The highlights of accreditation include African Fund Management (AFM) Holdings, which is a subsidiary of Sanlam.