9 December 2025
The International Monetary Fund has recommended a series of changes to Botswana’s tax regime to boost non-mineral revenues by 2% of the GDP over the medium term.
Specifically, in its annual Article IV report for the nation, the IMF has recommended that the Government broaden the revenue base by reviewing value-added tax zero rates and replacing corporate tax holidays for entities in Special Economic Zones with less costly investment tax credits.
Furthermore, it recommended making the personal tax regime more progressive, increasing recurrent property taxes, and eliminating distortions caused by transaction taxes on immovable property.
Other measures proposed by the Fund include:
- measures to counter international tax avoidance;
- taxing passive income more fully;
- the introduction of a carbon tax; and
- the launch of a large taxpayer unit.
The Fund also proposed a number of environmental tax reforms, including applying the standard VAT rate to diesel and petrol.
In talks with the Fund, the Government agreed with the IMF’s assessment and recommendations and said local authorities intend to prioritise enhancing digital infrastructure to boost compliance rates, broaden the tax base, and improve the tax agency’s capacity to tax online businesses.
The report notes that Botswana has made progress on the taxation of digital services, in line with the Fund’s recommendation in last year’s report. The Botswana’s 2025 VAT Amendment Bill introduces VAT on remote services, electronic fiscal devices, and reverse charge rules.
Source: https://shorturl.at/x1eNf
