The Botswana Unified Revenue Service (BURS) is scheduled to complete a pilot of the Value Added Tax e-billing system by March, paving the way for the full roll-out of the initiative aimed at enhancing tax collections.
According to the 2025-2026 Budget Strategy Paper issued by the Finance Ministry, the e-billing pilot has been ongoing for three years and is scheduled to end by March. The ministry described the e-billing initiative as a key priority in the effort to “further curb leakages and maximise revenue,” for government. “These e-service platforms are aimed at enhancing tax compliance for both individuals and businesses, fostering a business-friendly environment and encouraging investment. “Simplification of tax laws is also expected to boost tax revenue collections,” the Strategy Paper reads. Already in use in some countries in Africa, the VAT e-billing system involves digitising the tax invoicing system to allow live updates of transactions to the tax agency.
According to its last estimates, the BURS projects that it is losing between 30% and 50% of the VAT it could be collecting annually, figures which for the 2023-24 financial year equated to as much as P7 billion. BURS officials previously told journalists that a benchmarking exercise had been done in Rwanda and Tanzania amongst other countries. “The team went to Rwanda, which was an amazing experience where at one restaurant, as you buy, the system reports to Rwanda’s tax agency to say this is how much VAT is owed,” BURS customs services commissioner, Segolo Lekau, told BusinessMonitor previously. “As BURS, we would be able to see how much we are expecting by the time you come to do your returns,” he said. BURS commissioner of operations, Tutu Bakwena, previously explained that the rollout of the e-billing system would likely not be done across the board countrywide, taking into account the varying capabilities of the different commercial entities.
“The project manager will advise us whether we have a total rollout across all sectors for those registered for VAT or not. “But it is difficult to say at the moment and it may be a phased roll out depending on connectivity, access to machines and other factors,” said Bakwena. The efficiency of tax collections has become an urgency for government, as the prolonged slump in diamond sales affects budget revenues. This financial year, government expects to receive P15.2 billion in VAT, up from about P14 billion in the 2023-24 financial year. 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. While the tax agency has been reluctant to point out sectors which could be dodging their tax obligations, experts who previously spoke to BusinessMonitor said plenty of loopholes existed for tax evasion and avoidance.
The areas include large businesses that actively engage in tax avoidance where their liabilities are lessened, as well as VAT fraudsters. However, taxes are also being dodged in personal income tax where tax eligible small businesses employ people but do not register or pay tax while other areas include the withholding tax due on rentals. Importers, particularly from the Orient, are also accused of deliberately failing to register for VAT and actively encouraging cash sales in order to obscure their obligations.