Botswana signs tax deals with 17 countries
Keikantse Lesemela | Friday June 13, 2014 14:34
In 2013, Botswana signed similar agreements with 12 countries and this year has engaged five more countries including China, Zambia, Swaziland, Lesotho and Ireland.
The agreements are meant to facilitate closer co-operation between the countries’ tax administrations while also curbing or eliminating any chances of double taxation of income flowing between jurisdictions of the countries.
The director of tax policy in the Ministry of Finance, Boikanyo Mathipa told BusinessWeek that Botswana is in discussion with five more countries including Malawi, Tanzania, Belgium, Luxembourg and Serbia Montenegro. “We have concluded agreements with these countries, we are waiting for the signing ceremony then we will wait for ratification by the governments,” said Mathipa.
She however stated that they are still working on three countries as Serbia Montenegro has now separated into two different countries while Malawi and Tanzania are working to comply with international standards.
Botswana has been accused of not having adequate international agreements under which information for tax purposes could be exchanged. But Parliament approved the amendment of the Income Tax Act in December 2012 to allow the Botswana Unified Revenue Service to exchange information for tax purposes.
Speaking during a signing ceremony with Ireland on Tuesday, Minister of Finance and Development Planning, Kenneth Matambo said the agreement would also help to guard against tax evasion through mutual assistance in collection of taxes and exchange of information between the countries’ tax authorities. “I am optimistic that we will begin to witness some level of investment taking place between our countries,” he said.
Matambo said the agreement is important because it is compliant with international standards as determined by the Global Forum on Transparency and Exchange of Information for Tax purposes.
“Botswana will complete all the necessary procedures required by law to bring the agreement into force as soon as possible,” he said.
He explained that Botswana offers many advantages for investors with the lowest tax rates in the region, no foreign exchange controls, and low levels of crime and low level of corruption. “There exists untapped opportunities for investment in Botswana, especially in sectors such as manufacturing, agriculture and tourism,” explained the minister.