Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

February 12, 2019

Botswana issues 2019 budget

On 4 February 2019, Botswana’s Minister of Finance & Development Planning (the Minister), the Honorable O. K Matambo, presented the 2019 budget to Parliament.

This Alert outlines the key proposals.

Economic highlights

The 2019/2020 budget proposals emphasize the need for Botswana to consolidate development gains for further economic development. According to the Minister, this will be achieved through:

  • The reform of macro-economic policies
  • Streamlining service delivery processes

Through the above agenda items, the domestic economy growth rate is forecasted to be 4.5% (2018) and 4.2% (2019) against the global growth rates of 3.5% and 3.6% for 2019 and 2020 respectively.

The Minister confirmed that Botswana continues on a trajectory towards becoming a fully-fledged upper middle income economy.

Key statistics

  • Expected budget deficit of P7.34 billion for 2019/20 which is 3.5% of Gross Domestic Product, against the 2018/19 figure of 1.1%.
  • Positive economic growth of 4.5% expected for 2018 and forecasted growth to reach 4.2% in 2019 and 4.8% in 2020.

Fiscal legislation

The Minister reported on the passage of the following Acts:

  • The Customs Act
  • Company Registration Amendment Act
  • Registration of Business Names Amendment Act
  • The Companies Amendment Act
  • Re-registration of Business Act

There is a commitment to conclude the amendments to the Transfer duty Bill and Trade Act during 2019.

In addition, the Minister confirmed the publication of the Income Tax (Amendment) Act, 2018 – Act No.38 of 2018 amending the anti-avoidance provisions and introducing Transfer Pricing (TP) legislation. The effective date of the legislation is 1 July 2019.

Key features of the amendments include:

  • Arm’s-length principle – All transactions entered into by Botswana resident persons directly or indirectly with connected persons must be at arm’s-length.
  • Commissioner General’s (CG) powers – CG is given powers to make an adjustment to taxable income where a transaction between connected persons is inconsistent with the arm’s-length principle.
  • Documentation requirements – Botswana entities entering into transactions with connected persons must prepare, keep and furnish TP documentation upon request.
  • Advance Pricing Agreements (APAs) Taxpayers may apply to the CG to enter into an APA, and the terms and conditions of the APA are still to be prescribed by the Minister through regulations.
  • Repeal of the thin capitalization rules.
  • Codification of the International Financial Services Centre Company (IFSC) definition.
  • Penalties for non-compliance with transfer pricing.

For the complete budget speech go to

For additional information with respect to this Alert, please contact the following:

Ernst & Young Advisory Services (Pty) Ltd, Gaborone
  • Bakani Ndwapi |
  • Thomas Chitambo |
  • Cleverent Mhandu |
  • Gladys Makachiwa |
Ernst & Young Advisory Services (Pty) Ltd., Africa ITS Leader, Johannesburg
  • Marius Leivestad |
Ernst & Young LLP (United Kingdom), Pan African Tax Desk, London
  • Rendani Neluvhalani |
  • Byron Thomas |
Ernst & Young LLP, Pan African Tax Desk, New York
  • Dele A. Olaogun |



The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.


Copyright © 2024, Ernst & Young LLP.


All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.


Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.


"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.


Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct