Botswana’s new Income Tax, VAT and Tax Administration Acts take effect

On 1 July 2026 the Income Tax Act, 2025, the Value Added Tax Act, 2025 and the Tax Administration Act, 2025 replaced the statutes Botswana had used for decades. The three Acts were passed by Parliament after the February budget and gazetted in the second quarter.

For companies, the resident corporate income tax rate rises from 22% to 24.5%, while the non-resident rate falls from 30% to 24.5%. A new 10% withholding tax applies to profits repatriated by non-residents, and a domestic minimum top-up tax consistent with the OECD Pillar Two rules applies to in-scope multinational groups. The provisional tax payment requirement is reduced from 80% to 75% of the estimated liability, and the cost cap for capital allowances on passenger vehicles rises from P175,000 to P500,000.

Individuals earning more than P400,000 a year now pay 27.5% on the excess, up from 25%. Sole proprietors with supplies under P1 million in twelve months can elect a simplified regime: cash-basis accounting, immediate deduction of trading stock and depreciable assets, three-year record retention and a P48,000 exemption. Capital gains tax on land and shares is now payable within 28 days of disposal.

The Tax Administration Act creates a formal tax-ruling system, requires tax agents to register with the Commissioner General (with a P5,000 fine or a year’s imprisonment for practising unregistered) and establishes a specialised Tax Tribunal for objections and appeals. Record-keeping periods are harmonised at eight years across all tax types.

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.