2021 Tax Law Amendments

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SALARY TAX THRESHHOLD IS INCREASED FROM P36,000 TO P48,000. EMPLOYEES EARNINGS P48,000 OR LESS WILL NOT PAY ANY TAX EFFECTIVE 1 JULY 2021.   •So you pay a tax of P 13,050 yearly when you earn P 13,000 per month and you no tax if you earn P 4,000 a month.  But if you earn more than P 13,000, then you pay 25 thebe per Pula over and above P 13,000.
 
DIVIDEND TAX RATE IS INCREASED FROM 7.5% TO 10% EFFECTIVE 1 JULY 2021.  Long and short of it is that dividends are very costly because you pay 22% tax in order to make profit and then pay 10% on the balance 78% thus increasing tax to 29.8% for withdrawing a profit of 70.2%.  And… had you simply taken a salary it would only be 25% and you would have saved 4.8%.
 
•DIRECTORS FEES ON NON-WORKING DIRECTORS WILL BE SUBJECTED TO FINAL TAX AT 10% FOR RESIDENT DIRECTORS AND 15% FOR NON-RESIDENT DIRECTORS.  This is a good tax saving measure for non-executive directors.  They would be paying tax at 25% now they clearly save 10% tax on the fee.  Again growing companies can have foreign non-resident directors for final withholding tax deduction of 15% and they don’t have any obligation to file tax returns in Botswana.
OTHERS
 
Go with your shopping bag to save P 0.15 PER plastic bag from 1 JULY 2021.
Consume less SUGARY DRINKS for there was a price increase from 1/4/21 because of Sugar Tax.
Increase by P1.00 / litre of petrol and diesel from 1/4/21
VAT is 14% from 1/4/21

Tax on second hand imported vehicles?  NOT YET IMPLEMENTED!

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Authors

Gaolese Mosimanegape
Accounts Manager