Botswana tax rates 2026

Tax on P400,000 of taxable income is P74,050, and every pula above it is taxed at 27.5%.

An individual is resident in Botswana for a tax year when their permanent home is in Botswana, or when they spend 183 days in the country within any 12-month period that begins or ends in that year. Days away on business trips or holidays still count as days present, and any part of a day in Botswana counts as a full day. Government employees posted abroad remain resident throughout their posting.

In the year of arrival, residence starts on the first day in Botswana, and in the year of departure it ends on the last day there. A resident is taxed on income from all sources inside and outside Botswana. The exception is the temporary resident, someone living in Botswana only to work there for up to three years, who is taxed on Botswana income alone. Citizens and permanent residents cannot be temporary residents.

The tax year runs from 1 July to 30 June. Employers withhold PAYE from every salary payment and pay it to the Botswana Unified Revenue Service (BURS) within 14 days after the end of the month. An employee whose only income is salary from one employer files no return unless BURS asks for one, and may file to reclaim tax withheld in excess.

Everyone else files a self-assessment return within three months after the tax year ends, and the tax is due on that date. Taxpayers expecting a liability of P50,000 or more pay four instalments of 25% in the 3rd, 6th, 9th and 12th months of the tax year and lodge their estimate with the first one. Capital gains go on the same return, and companies file within four months after their accounting period.

Non-residents pay tax only on income from a Botswana source. Salary is Botswana income when the work is done in Botswana, wherever it is paid, and Government pay counts wherever the work is done. Work a resident employee does abroad during a temporary absence still counts as Botswana work. Non-resident individuals get no tax-free band: their scale charges 5% from the first pula and joins the resident rates above P84,000.

Technical fees and director's fees paid to non-residents carry a final withholding tax of 15%, the same rate as interest and royalties, while entertainers' fees carry 10% and insurance premiums 3%, with no deduction for costs. Gains are taxed only on Botswana assets: land, mining rights, shares in resident companies, and shares in any entity that drew more than half its value from such assets in the year before the sale.

Dividends from a Botswana company carry 10% withholding, which is the final tax for a resident individual. Interest a resident individual earns from a bank or building society carries 10% withholding, also final. Capital gains of individuals are not added to income: the year's gains, less losses, are taxed on a separate scale with the first P36,000 tax-free, rising to 27.5%. A net loss can be carried forward to the following year only.

For land and buildings held for more than a year, the purchase price and improvements are indexed to the national cost of living index before the gain is worked out. A principal home owned for at least five years is exempt, once in any five years. Gains on shares of resident companies held for a year and traded on the Botswana Stock Exchange are exempt, as are gains on government and Bank of Botswana bonds. Tax on a gain is paid in advance within 28 days after the sale.

Gifts and inheritances fall under Capital Transfer Tax, paid by the recipient on everything received from one donor in a tax year. A spouse inheriting from a spouse pays nothing, and casual gifts of up to P5,000 a year to one person and spending on a child's maintenance or education up to age 21 are exempt. Property outside Botswana passing to a beneficiary who lives abroad is outside the tax, and the first P100,000 of a deceased estate is deducted.

Businesses in Botswana collect tax on several domestic payments. Rent for property in Botswana carries 5% withholding once the tenant's rent for the year reaches P48,000, while private tenants renting a home and hotel or lodge stays are outside it. Commissions and brokerage carry 10% once they reach P48,000 a year, directors' fees paid by resident companies 10%, and payments under construction contracts 3%. A payer that fails to withhold becomes personally liable for the tax.

Each withholding agent files an annual return within 28 days after the tax year closes. International financial services centre companies pay 15% on approved financial operations and mutual associations 5%. VAT registration becomes compulsory once taxable supplies exceed P1,000,000 in 12 months.

A new Income Tax Act and a new Tax Administration Act took effect on 1 July 2026, and Parliament re-enacted the VAT Act, keeping the standard rate at 14%. The largest change is scope: until 30 June 2026 income tax fell only on income from a Botswana source, and the worldwide charge on residents replaced that rule.

The 2026 Act sets strict conditions for relief on foreign income. The foreign tax credit requires a receipt from the foreign tax authority, the foreign tax must be paid within two years after the end of the tax year, and credit left unused in a year is lost rather than carried forward or refunded.

From 1 July 2026 residents pay tax on worldwide income, while a temporary resident living in Botswana only to work there for up to three years pays on Botswana income alone. IFSC companies pay 15% on approved transactions with non-residents. SEZA companies pay 5% for 10 years, then 10%. Manufacturing and BDIH companies pay 15%.