The Botswana Unified Revenue Service (BURS) is expected to collect P44.1 billion in various taxes in 2021-2022, up from P37.9 billion in the current financial year ending on March 31, with the increase helped by tax increases and tighter collections.
Finance ministry figures seen by BusinessWeek indicate that the increase in Value Added Tax (VAT), Withholding Tax, as well as the new sugar tax, will help the BURS’ numbers this year. The BURS is the spearhead of the government’s efforts to boost budget revenues and return to fiscal sustainability following years of deficits under NDP11.
However, the tax inspector has fallen below targets set by the Finance Ministry in the past few years, collecting about P38 billion in 2019-2020 against a target of P41 billion. For the financial year ending on March 31, the BURS is expected to have collected P37.9 billion against a target of P44.4 billion, due largely to the impact of COVID-19. According to Finance Ministry documents, VAT collections in 2021-2022 are expected to reach P10.7 billion compared to a forecast P7.1 billion in the current financial year, while non-mineral tax should reach P13.8 billion from P11.8 billion. VAT is due to increase to 14% from April 1, while Withholding Tax will rise to 10%. Personal tax thresholds at the bottom of the scale have, however, been reviewed.
Mineral taxes should reach P5.6 billion from P1.8 billion in the current year, while customs and excise receipts are expected to decline to P13.5 billion from P16.5 billion. Customs and excise revenues are received through a revenue-sharing agreement under the Southern African Customs Union (SACU).
The P44.1 billion target tax
Matsheka has said this will largely depend on a resurgent performance of diamond mining led by Debswana, where production dropped by 29% last year.
Meanwhile, Vice President, Slumber Tsogwane has come out in defence of the increased taxes, saying the government had actually restrained the extent of review required.
“Not all the truth has been spoken about taxes,” he told Parliament on Tuesday.
“Our resource base is still narrow and we have 28 zero-rated products and 24 exempted.
“VAT has gone up but the zero-rated and exempt have not been raised.
“People are not telling the whole picture of taxes.”
For her part, in the same Parliament session, Investment, Trade and Industry minister, Peggy Serame, said Batswana need to be educated that public services that appear free, actually have a cost attached to them.
“Batswana must understand the true cost of provision of service,” she said.
“You may pay P5 at the clinic but you see a doctor, get medication, see a specialist and others. What is the true cost?
“These programmes that we have in Botswana, Batswana must know that there’s nothing free and the only issue is who is paying and how much.”