New tax law on interest good for business

Jonathan Hore
Jonathan Hore

Ever since the enactment of Income Tax Amendment Act 38 of 2018 in December 2018, interest deductions for companies were capped through a rather technical formula which refers to 30% of what is known as Tax EBITDA.

Any excess interest determined by such formula would technically be added back to profits and increase the tax costs of companies. Following the said amendment, there was a lot of debate and anxiety in business about the possibility of the law slowing down business growth through discouraging borrowing.

Technically, the law precluded, effective July 1, 2019, the tax deduction of 100% of interest expenses for companies, including productive interest such as for expansion and acquisition of property. The only two groups of taxpayers who were not affected by this law were banks and insurance companies.

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Bravo police for prompt action

It is also hurting that whilst we all know that the Botswana Police Service (BPS) is charged functionally with the duties to investigate all forms of crime, some locals have resorted to taking the law into their own hands. It is very wrong to do that. There is also a possibility that one may wrongfully take the life of a person in the process, unless it is a justifiable case of self-defence. Recently, in the city of Francistown, some locals found...

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