Income tax in Botswana
Taxation Researcher | August 18, 2021
INDIVIDUAL TAXATION
Resident individuals are taxed on all their income from sources in Botswana. Married couples are assessed and taxed separately.
The tax year is 01 July of one year up to 30 June of the next year. The tax year 2021 is from 01 July 2020 up to 30 June 2021. The tax year 2022 is from 01 July 2021 up to 30 June 2022.
INCOME TAX
Income of taxable individuals is classified according to the following categories: (1) employment income, (2) income from trade, business or vocation, and (3) income from immovable property.
Income of resident individuals is taxed at progressive rates. Taxable income is computed generally as gross income less allowable deductions, which are expenses necessary in producing income.
INCOME TAX - NON-RESIDENTS 2021 |
|
| TAXABLE INCOME, BWP (US$) | TAX RATE |
| Up to 84,000 (US$8,400) | 5% |
| 84,000 – 120,000 (US$12,000) | 12.50% on band over US$8,400 |
| 120,000 – 156,000 (US$15,600) | 18.75% on band over US$12,000 |
| Over 156,000 (US$15,600) | 25% on all income over US$15,600 |
| Source: Global Property Guide | |
INCOME TAX - NON-RESIDENTS 2020 |
|
| TAXABLE INCOME, BWP (US$) | TAX RATE |
| Up to 60,000 (US$7,200) | 5% |
| 60,000 - 90,000 (US$10,800) | 12.50% over US$7,200 |
| 90,000 - 120,000 (US$14,400) | 18.75% over US$10,800 |
| Over 120,000 (US$14,400) | 25% on all income over US$14,400 |
| Source: Global Property Guide | |
RENTAL INCOME
Rental income is taxed at progressive rates. Any expenses that are unavoidably incurred in producing rental income are deductible. These expenses include interest on loans, improvements, irrecoverable rent, and others.
Rental income is subject to withholding tax at a rate of 5%. This tax is credited against the taxpayer´s final income tax liability.
CAPITAL GAINS
There is no separate capital gains tax in Botswana. Capital gains realized from selling real property is subject to income tax. Capital gains are gross sales price less acquisition costs, improvement costs, and transaction costs.
CAPITAL GAINS TAX |
|
| TAX BASE , BWP (US$) | TAX RATE |
| Up to 18,000 (US$1,800) | 0% |
| 18,000 - 72,000 (US$7,200) | 5% on band over US$1,800 |
| 72,000 - 108,000 (US$10,800) | 12.50% on band over US$7,200 |
| 108,000 - 144,000 (US$14,400) | 18.75% on band over US$10,800 |
| Over 144,000 (US$14,400) | 25% on all value over US$14,400 |
| Source: Global Property Guide | |
Residents are exempted from capital gains tax when they sell their principal private residence. This exemption will apply only once in the life time of the taxpayer.
PROPERTY TAX
There are no property taxes in Botswana.
CORPORATE TAXATION
INCOME TAX
Income and capital gains earned by resident companies are generally subject to corporate income tax at a flat rate of 22%. Income-generating expenses are deductible when calculating taxable income.