New digital tax due by April
Mbongeni Mguni | Monday September 29, 2025 06:00
Amendments to the Value Added Tax Act passed by Parliament in August are awaiting assent by President Duma Boko. The Botswana Unified Revenue Service (BURS) is meanwhile working around the clock to prepare for the changes, with deputy secretary of financial policy, Boikanyo Mathipa, saying the law would likely kick in “around March or April 2026”.
“The service providers will have to firstly register with BURS as registered persons, and they will also have to modify their systems so that when they provide a service to consumers in Botswana, they charge VAT,” she told the media on Tuesday. “BURS also has to be prepared to register these service providers and to receive VAT from them. So we are thinking that maybe we can look at the Act commencing by March or April 2026.”
Under the amendments, non-resident providers of digital and remote services to consumers within Botswana will be required to register for VAT and remit this to the government. The approach essentially means digital services such as Netflix, Alibaba, as well as applicable products from Google, Apple, and Meta, will now attract VAT paid by consumers in the country.
Local consumers wishing to secure remote services such as attorneys and accountants or data services will also incur the VAT charge under the new law.
The tax collector plans to use IP addresses and banking details to capture any Botswana-based consumer of digital and remote services.
The planned digital tax was first proposed in the Budget Strategy Paper of October 2020, as the government scrambled to raise more money to fill the holes created in the budget by COVID-19. However, whilst other new taxes, such as the sugar tax, were introduced in April 2021, the digital tax has been in planning over the years.
Mathipa said that whilst efforts continued towards a holistic review of tax laws, the ministry had fast-tracked the VAT amendments, looking at the country’s constrained fiscal situation.
“We are seeking ways to improve the fiscal situation in Botswana. “As you know, we are currently experiencing fiscal challenges due to the decline in mineral revenues, and the current VAT mainly focuses on physical goods and locally supplied services. “Therefore, this Bill is coming up with some provisions to mobilise revenue, and we needed to recognise the emergence of the digital economy and provision of remote services,” she said.
The deputy secretary explained that whilst imported goods could be charged tax on arrival in the country, the country’s laws did not account for digital services and remote services provided by those based outside the country.
BURS Commissioner General Jeanette Makgolo said the amendments would also ensure that the country’s tax system keeps pace with international standards while creating a fair, competitive environment between local and foreign suppliers.
She explained that the new legislation also introduced VAT e-billing, a long-awaited development expected to enhance collections for the tax agency and government coffers.
'The legislation mandates the compulsory use of certified electronic fiscal devices for all registered traders,' she said. 'These devices will serve to record sales transactions and issue fiscal invoices or receipts, fostering transparency, efficiency, and reducing opportunities for tax evasion.'
Once the amendments kick in, VAT-registered businesses that fail to use e-billing devices or systems will be liable to fines of P10,000 per month. The Act also provides a penalty of P100,000 for tampering with electronic VAT devices or trying to defraud the system.
The efficiency of tax collections has become an urgency for government, as the prolonged slump in diamond sales affects budget revenues.
A tax gap analysis by the BURS in 2021 indicated that up to 60% of those who were supposed to be paying various types of taxes were not.