Finance minister, Nadaba Gaolathe, announced a hike to the corporate income tax rate, and to the top personal income tax rate, in his 2025 Budget Speech in February. Gaolathe proposed to raise the corporate tax rate and the top personal tax rate by 1.5%, meaning that the new corporate income tax rate would be 23.5%, and the top personal income tax rate would be 26.5%. However, the Six (6+1) Cooperating Trade Unions say the decision will have an impact on the already constricted buying power of the workers. Speaking during the Six (6+1) Cooperating Trade Unions’ press conference on Wednesday, Botswana Public Employees Union (BOPEU) deputy secretary-general, Ketlhapeng Karab,o said while they agree in principle with government on the need to create a ‘cake’ for the country, they believe that increasing tax at this moment is not a way to go about it. He argued that instead of burdening taxpayers, the government must urgently address the financial leakages draining billions from State coffers. Karabo said what government needs to do first is to plug the leaks in the budget, which have rendered government revenue collection vulnerable. He said what government is trying to achieve is akin to filling up a leaking bucket.
For example, he said there are leaks in government tenders, which has cost the State millions of pula. “People think we don’t want the government to create a cake. But trade unions as partners, agree with government on the creation of wealth for government, which we should share, but it shouldn’t affect the buying power of workers, which is already overburdened. We call on government to stop implementing the proposed 1.5% tax increase but rather call a tripartite to engage first on this matter to show them where the money is where to plug the leaks. Instead of refurnishing a house at a cost of P700 000, check if you can’t do it at P300 000,” he said. He said trade unions have the solutions to these issues and are eager to help government find revenue collection solutions, which would not affect the workers. “We met with the minister twice, the last being on April 1. He promised that he will take the proposal and engage further on it. He agrees with us on the issue of dysfunctional systems and wastage in government. For example, BURS has in the past made profit without even reaching its collection target. This shows that there are a lot of revenue streams that can be targeted before the implementation of the 1.5% increase. The other issue is that he agrees that he has not done consultation with the social partners. We are not saying we don’t totally agree with the model but we believe it can be modified to ensure that it doesn’t involve the workers,” he added.
