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February 11, 2020
Botswana’s Finance Minister delivers 2020/21 Budget Speech
The Honorable Dr. Thapelo Matsheka, Botswana’s Minister of Finance & Development, delivered the Budget Speech to Parliament on 3 February 2020. Highlights of the Budget speech, including a proposal to attract foreign direct investment, are discussed below.
In his maiden budget speech, the Minister announced that the new 2020/21 budget will focus on two major areas:
According to The Minister, the domestic economy growth rate is forecast to be 3.5% in 2019 and 4.4% in 2020 as compared to the global growth rate of 2.9% and 3.3% for 2019 and 2020 respectively. The Minister re-affirmed the need to have an average growth rate of 6% to transform Botswana to a full-fledged higher income economy. Botswana has set targets to become a middle-income economy with per capita income of US$12,000 by 2036.
Key budget statistics
The Minister announced the introduction of a comprehensive investment incentive package administered by the Special Economic Zone Authority (SEZA) which is meant to attract foreign direct investment. Within the package are the following incentives offered to qualifying investors:
As a measure to increase revenue collection without increasing tax rates, the Botswana Unified Revenue Authority (BURS) will re-deploy staff in areas that include debt management and post clearance audits.
In addition, all public sector service delivery fees, charges and levies will be adjusted with effect from 1 April 2020 and thereafter on an annual basis.
For the complete Budget Speech go to www.gov.bw.
For additional information with respect to this Alert, please contact the following:
Ernst & Young Advisory Services (Pty) Ltd, Gaborone
Ernst & Young Advisory Services (Pty) Ltd., Africa ITTS Leader, Johannesburg
Ernst & Young LLP (United Kingdom), Pan African Tax Desk, London
Ernst & Young LLP (United States), Pan African Tax Desk, New York