Botswana Budget Speech 2021
The 2021 Budget Speech was delivered to the National Assembly by Hon. Dr Thapelo Matsheka, the Minister of Finance and Economic Development on 1st February 2021
The down-sides (as we see them) were as follows:
Botswana’s VAT rate will rise to 14% from 1st April 2021
The Fuel Levy will increase the price of fuel by P1.00 per litre from 1st April
Tax on Company Dividends is to increase to 10%
The up-sides were:
The income tax exemption limit will be raised to P4,000 per month, so those earning less than P48,000 per year will not pay tax.
There will be a tax amnesty to allow companies to get their affairs in order without being hit by penalties and interest.
Other negatives for Botswana:
GDP shrinks by 7.7% from 2019 to 2020 (projected figures)
Forex reserves down 10% P58.7 billion(Nov 20) down from P65.2bn (Dec19)
Government reserves down 68% GIA account P5.6 billion (Nov20) down from P17.8bn (Dec19)
Pula downward crawl at 2.87% pa - weights still 45% ZAR and 55% SDR "hard currencies"
VAT + Dividend tax + Fuel Levy increases plus sugar levy, second hand vehicle levy, plastic bag levy
Botswana Positives:
100MW Solar Power Tenders - Plus 35MW of small grid tied solar projects
Government to 'right size' public service - abolish 50% of vacancies by 1st April
Industrial Support Facility of P1.3 billion -loans of P900m business, P200m tourism, 100m agriculture
Tax Amnesty & Tax Exemption increase - Incomes exempt up to P4,000pm; amnesty if back taxes paid