EU extends deadline for Botswana tax greylisting
Mbongeni Mguni | Friday February 21, 2020 15:37
The EU, which is the world’s single richest market, says Botswana now has until August 31, 2020 to sign a tax cooperation deal, under which the country will commit to a wide range of commitments around information sharing, transparency and tackling tax evasion and avoidance.
Should Botswana fail to sign the deal by that date or get Parliament to ratify it by August 30, 2021, the country will be blacklisted and face the inevitable global backlash.The deal, known as the OECD Multilateral Convention on Mutual Administrative Assistance, provides for ‘all possible forms’ of administrative co-operation between states in the assessment and collection of taxes.
“This co-operation includes automatic exchange of information, simultaneous tax examinations and international assistance in the collection of tax debts,” reads a brief on the deal from the Organisation for Economic Co-operation and Development (OECD), an economic and trade coalition of developed countries.
In a statement on Tuesday, the EU noted the progress Botswana had made since its initial greylisting in December 2017. The organisation noted that Botswana had committed to having a sufficient rating by the end of 2019 and thus a supplementary review was required.
Botswana has been on the tax greylist since the EU first published it in December 2017 and has remained there through 11 updates that have resulted in other nations being removed and others added.
Since December 2018, the greylist has been declining from 63 countries to the current 32, which besides Botswana also includes Namibia, eSwatini, Australia, British Virgin Islands, Turkey and others.
In the latest update, the EU added four more countries to its existing blacklist of eight, being the United Kingdom’s Cayman Islands, Panama, Palau and the Seychelles.
Seychelles, like Botswana, had been in the greylist since December 2017, before its blacklisting on Tuesday.
While the EU did not state the “meaningful progress” analysts told BusinessWeek Botswana had made huge strides in addressing the organisation’s concerns.
“France blacklisted Botswana as a tax haven in 2012 and end of last year they removed that because they saw that we had made tremendous progress with regard to exchange of tax information,” an analyst said.“Botswana has also entered into numerous exchange of tax information agreements and even renegotiated many Double Taxation Agreements to include greater information sharing. “The country has a desire to protect its ability to attract FDI and is very willing to be more transparent about its tax affairs.” “Even though Botswana is a low tax regime, it is very open to signing all these agreements around exchange of tax information.