Income tax in Botswana

July 03, 2018

Botswana homes for sale

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 2018 is from 01 July 2017 up to 30 June 2018. The tax year 2019 is from 01 July 2018 up to 30 June 2019.

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 - RESIDENTS

TAXABLE INCOME, BWP (US$) TAX RATE
Up to 36,000 (US$3,600) 0%
36,000 - 72,000 (US$7,200) 5% on band over US$3,600
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

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.

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