Gaborone GMT +2
EY
Mail address:
Street address:
22 Khama Crescent
P.O. Box 41015 Second Floor
Gaborone Gaborone Botswana Botswana
Indirect tax contacts
Langton Madzamba
Bakani Ndwapi
+267 397-4078
+267 365-4003
langton.madzamba@za.ey.com
+267397-4078
+267365-4010
bakani.ndwapi@za.ey.com
A. At a glance
Name of the tax
Local name
Value-added tax (VAT)
Value-added tax (VAT)
Date introduced 1 July 2002
Trading bloc membership Southern African Customs Union, Southern African Development Community (SADC) African Continental Free Trade Area (AfCFTA)
Administered by Botswana Unified Revenue Service (http://www.burs.org.bw)
VAT rates
Standard
Other
VAT number format
VAT return periods
14%
Zero-rated (0%) and exempt
A unique VAT number for individuals, partnerships and trusts is system-generated and auto-allocated
Monthly (annual taxable supplies greater than BWP12 million (Botswana pula)
Bimonthly (annual taxable supplies below BWP12 million)
Registration thresholds BWP1 million
Recovery of VAT by non-established businesses No
B. Scope of the tax
VAT applies to the following transactions:
• The supply of goods and services in Botswana by a taxable person.
• Reverse-charge services received by a person making exempt supplies in Botswana.
• The importation of goods from outside Botswana, regardless of the status of the importer.
Goods that are imported from countries within the Southern African Customs Union (consisting of Botswana, Lesotho, Namibia, South Africa, and Eswatini) are not subject to customs duty.
The VAT rates are:
• Standard rate: 14%
• Zero-rate: 0%
The standard rate of VAT applies to all supplies of goods or services unless a specific measure provides for the zero rate or an exemption.
The standard rate was increased from 12% to 14% from 1 March 2023. It was previously temporarily reduced to 12% for the six-month period beginning 3 August 2022 to 28 February 2023.
Examples of goods and services taxable at 0%
• Exports of goods and services
• Cooking oil
• International transport
• Sale of a business as a going concern to a registered person
• Fuel for vehicles
• Illuminating paraffin
• Petroleum gas
• Sorghum and maize meal for human consumption
• Bread flour, sugar, brown bread, fresh fruits, rice, milk and samp (i.e., coarsely ground corn)
• Intellectual property rights for use outside Botswana
• Household consumption of water up to 5,000 liters or 25 drums of 200 liters
The term “exempt supplies” refers to supplies of goods and services that are not liable to VAT and that do not qualify for input tax deduction.
Examples of exempt supplies of goods and services
• Medical services provided in a public medical facility
• Supply of prescription drugs
• Education
• Some agricultural farming implements
• Financial services (unless provided for a fee, charge or commission)
Option to tax for exempt supplies. The option to tax exempt supplies is not available in Botswana.
E. Time of supply
The time when VAT becomes due is called the “time of supply” or “tax point.” In Botswana, the basic tax point is the earlier of the issuance of an invoice or the receipt of any payment.
Other tax points are used for a variety of situations.
The following is the tax point for supplies between related persons:
• For a supply of goods, either when the goods are removed or when they are made available to the purchaser or recipient of the goods.
• For a supply of services, when the services are performed.
The tax point for periodic supplies is the earlier of the date on which payment is due or the date on which payment is received.
The tax point for goods or services provided to a branch or principal business outside Botswana is when the goods are delivered or when the services are performed.
Deposits and prepayments. The tax point for the supply of goods or services on payment of a deposit (other than a deposit paid on a returnable basis) is when the supplier applies the deposit as consideration for the supply, or when the deposit is forfeited.
• Any imports of goods, other than capital goods, made by the person prior to becoming registered, to the extent that the goods are for use or resupply in a taxable activity carried on by the person after registration, provided the goods are not supplied or imported more than four months prior to the date of registration.
Bad debts. A VAT-registered person can claim VAT on a bad debt that has been written off. The VAT is claimed on the later of the date the bad debt was written off, or 12 months after the end of the tax period in which the VAT on the bad debt was accounted for. When the bad debt is recovered, the registered person is required to recoup the VAT previously allowed as input tax.
Noneconomic activities. Input tax incurred on purchases that are used for noneconomic activities is not recoverable in Botswana.
G. Recovery of VAT by non-established businesses
Input tax incurred by non-established businesses that are not registered for VAT in Botswana is not recoverable.
H. Invoicing
VAT invoices. Registered persons must provide VAT tax invoices for all taxable supplies made, including exports.
Credit notes. A VAT tax credit note may be used to reduce the VAT charged on a supply of goods or services. Tax credit and debit notes must show the same information as tax invoices.
Electronic invoicing. Electronic invoicing is allowed in Botswana, but not mandatory.
Scope of electronic invoicing. For B2B, B2C and business-to-government (B2G) supplies, electronic invoicing is allowed but not mandatory in Botswana. There is no threshold beyond which taxable persons are required to adopt electronic invoicing in Botswana. The requirements related to electronic invoicing are the same as those for paper invoicing.
There are no rules restricting the use of electronic invoicing in Botswana.
At the time of preparing this chapter, legislation detailing the guidelines on electronic invoicing is under draft and may be gazetted within 2025.
Simplified VAT invoices. A VAT-registered person can issue simplified VAT invoices (by way of a nontax invoice or receipt), provided the amount does not exceed BWP20.
Self-billing. Self-billing is allowed in Botswana. This is provided that both the buyer and seller are registered for VAT, and they have agreed that the buyer will issue the tax invoice and not the seller, and the Commissioner General has granted written approval to issue a “recipient-created tax invoice.”
Proof of exports. Goods exported from Botswana are zero-rated. However, to qualify for a zero rating, exports must be supported by evidence that proves the goods left Botswana.
Foreign currency invoices. A Botswana VAT tax invoice must be issued in the domestic currency, which is the Botswana pula (BWP). If an amount is expressed in a currency other than the Botswana pula, the following are the rules for converting the VAT and value amounts to local currency:
• For imports, the amount must be converted at the exchange rate determined by the Customs and Excise Duty Act.
• For other supplies, the amount must be converted at the exchange rate at the time when VAT is accounted for on the supply.
Statute of limitations. The statute of limitations in Botswana is five years. Where the Commissioner General is not satisfied with a return or import declaration furnished by a taxable person, they can reassess the return or import declaration within five years from the date the return was furnished or when the import was made.
However, the reassessment can be made at any time where the default was due to fraud; or due to gross or willful neglect committed by, or on behalf of, the taxable person who furnished the return or import declaration.