Global Daily Tax News, Botswana Enacts Tax Reform Laws, (Jul 9, 2026)

Botswana's tax authority has confirmed the entry into effect of various tax reform measures, including a corporate income tax rate hike.

Among other things, the tax agency has confirmed the implementation of value-added tax on remote services, which is expected to be levied starting from October 1, with prior registration required. For business-to-business supplies, VAT will be accounted for under the reverse charge mechanism.

Further, VAT law amendments newly enacted extend the input VAT credit claim period from four months to 12 months, and where not utilized these credits will be carried forward for four months before being refundable.

The tax agency has also confirmed the enactment of Income Tax Act amendments to implement the new income tax surcharge on the nation's highest earners, establishing a new 27.5 percent tax rate on income exceeding BWP400,000 (USD30,580), as announced in the 2026/27 Budget.

Further, the corporate income tax rate has been raised to 24.5 percent, up from 22 percent – less than the 25 percent rate initially proposed in the Budget – effective from July 1, 2026. The non-resident corporate tax rate is also set at 24.5 percent.

Among other things, the legislation also includes comprehensive provisions governing the creation of permanent establishments; establishes a tax on repatriated profits for non-residents; and introduces a three percent withholding tax on insurance premiums.

The Tax Administration Act has also been amended to introduce a binding tax ruling system, provide for the registration of tax agents, create the Tax Tribunal, and provide for an eight-year record-keeping requirement for both VAT and income tax.

Further, it provides for the following deadlines:

• Filing and payment of VAT - 28th day of the month following the end of the tax period;

• Self-Assessment Tax (SAT) payment - 28th day of the month following the end of the quarter;

• Payment of withholding taxes - 14th day following the month of withholding;

• Filing and lodging objections – within 60 days from the date of notice of the tax decision; and

• Annual withholding tax return (PAYE and OWHT) – within 28 days after end of tax year.