Mphoeng Mphoeng, Partner and Director at MP Consultants, told a recent panel discussion at the inaugural Budget Belief Dialogue hosted by First Capital Bank that the decline has left the Treasury with no choice but to look for options. “The government probably doesn’t have a choice,” Mphoeng said. “Twenty years ago mineral receipts funded 60 to 70% of our budget.” His remarks come as a P26.35 billion deficit is projected for the financial year 2026-27, which will mainly be unfinanced. Other incomes will be from SACU and non mining sector while mineral revenues (mainly diamonds), once the backbone of the economy, are expected to remain subdued, fundamentally altering Botswana’s fiscal model.
Against this backdrop, the Treasury has proposed a number of tax amendments mainly on the Value Added Tax, taxing the high earners and I International Financial Services Centre (IFSC) companies amongst others. Corporate tax will rise from 22% to 24.5% while IFSC tax rate or tax on qualifying activities profits increases from 15% to 17.5% and a new personal income tax bracket has been introduced for annual earnings of between P156,000 and P400,000 as part of efforts to strengthen domestic revenue mobilisation.
