Presenting the 2026/27 budget on 9 February 2026, the Minister of Finance reported that the economy contracted 2.8% in 2024 and a further 0.4% in 2025, mainly because of the diamond downturn, and projected a 3.1% rebound in 2026.
Total revenue and grants are estimated at P77.22 billion. SACU receipts of P26.79 billion are the largest source, followed by non-mineral income tax at P19.76 billion and VAT at P15.10 billion. The net financial asset position has fallen from about 40% of GDP in 2008 to minus 30.1% in 2024, which the Minister described as the central constraint on the budget.
The tax measures were a 2.5-point increase in the top personal income tax bracket above P400,000, an increase in corporate income tax (enacted at 24.5% in July), a reduction of the zero-rated VAT list, VAT on remote services and electronic invoicing. The Minister also announced a National Fund of Funds for MSMEs to be operational in 2027/28 and full operation of the national e-Procurement system before the end of 2026/27.
Foreign exchange reserves stood at P47.4 billion, about five months of import cover, at December 2025. Inflation was 3.9% and the policy rate 3.5% at the time of the speech; both have since risen sharply.
What this means for you
- The P77.22 billion revenue target assumes the tax increases are collected; expect firmer BURS enforcement.
- Suppliers to government should register on the e-Procurement system as it rolls out.
- MSMEs should prepare financial statements now to be ready for the Fund of Funds in 2027/28.
If any of these points apply to your organisation, talk to us. We will tell you what needs to change and what it will take.
Parliament of Botswana: 2026 Budget Speech
Ministry of Finance
Published 10 February 2026. This article is general information, not advice for a specific situation.