Taxes

Registration For Tax

Income Tax

It is a requirement that any person earning taxable income should accordingly register with BURS so that the income can be assessed and taxed on submission of the tax return. 2011 tax Amendments makes it compulsory for all persons with taxable income in excess of P36000 per annum to register and file a return even if the only source of income is employment which has been taxed at source through PAYE.

The changes – requirements for registration
1. Private Companies

The following forms (certified copies) should be included in the application form (BURS 1)
Form 4 – Certificate of Incorporation
Form 2A – List of Directors and Secretaries
Form 2B – Consent and certificate of Director(s)
Form 2C – Details on share capital
Form 2D – Consent of Directors on share capital

Note

Every director and secretary listed in Form 2A should complete Form 2B. If Form 2A states that there are three directors, then there should be three Form 2B and one for the secretary.
If there is a change of Directors or secretary, then Forms 13 and 14 should also be submitted. It is also important to note that if Forms 13 and 14 are submitted, they should reconcile with the original Forms 2A and B.
If there is a change of a registered office,Form 15 should be submitted.
If there is any change of name, it should be reflected in Form 4.2. Closed Companies

The following forms (certified copies) should be included in the application form (BURS 1)
Form 4 – Certificate of Incorporation showing CC after the name.
Form 2E – List of members of the Close Company
Form 2F – Consent by each member in the Close Company.
Form 2G – Appointment of an Accounting Officer
The above requirements are contained in the New Companies Regulations 2007.

3. Old regulations relating to registration of companies
These Old Regulations are still applicable to companies registered before the new regulations came into effect on 3rd July 2007. Note that any companies registered after this date are affected by the new regulations.

The requirements are as follows (certified copies):
Form 3 – Certificate of Incorporation replaced by Form 4
Form 2 – List of Directors replaced by Form 2A
Memorandum & Articles of Association.
Note

Form BURS 1 gives options of registering for Income Tax (Assessed Tax), Withholding Tax, Other Withholding Tax and Capital Transfer Tax.

4. Individuals
When registering as an individual taxpayer, the same application form i.e. BURS 1 is used for the purpose. Certified copies should be submitted
For employment cases, a copy of Omang or Identity Document , residence permit and work permit should be enclosed.
For an individual doing some business, a copy of Form RBN A should also be submitted.

5. Other taxpayers
As mentioned above, the same registration form (BURS 1) is used to register other taxpayers not mentioned above. These are
Trusts – Certified copy of Trust deed should be enclosed.
Partnership – Certified copy of Partnership agreement should be enclosed.
Estate – Certified copy of Will
Fund – Certified copy of Fund rules
Body of Persons – Certified copy of constitution

Value Added Tax (VAT)

The requirements for registering for VAT is that any person making taxable supplies with a value of more than P1000,000.00 per anum must register for VAT. Similarly, a person is required to register for VAT if he knows or believes that the value of his taxable supplies in the next twelve month period will exceed P1000,000.00 per annum.

A person making taxable supplies with a value less than P1000,000.00 but more than P500,000.00 may apply to be registered voluntarily. This may be important for a small enterprise making zero – rated supplies (e.g. exports) or those who need to have Tax invoices so that they can claim credits for the VAT payable on inputs. Approval by the Commisioner General is required for voluntary registration.

Any person making taxable supplies with a value less than P500,000.00 is not required to register for VAT.

It is a requirement to register for Income Tax before registering for VAT as the Income Tax TIN (Taxpayer Identification Number) will be used to get the VAT Number.
The following forms should be included in the application Form (BURS1)

Form 3 – Certificate of Incorporation(certified copy)
Form 2 – List of Directors (certified copy)
List of Assets
Certified copies of Omang for Directors
Certified copies of Residence Permits and Work Permits for non residents.

Income Tax

Income Tax

Income Tax is a direct tax that is levied on persons  income and gains for each tax year. It is administered under Income Tax Act (ITA) Cap 52:01.It is source based, this means that tax is levied on income generated or deemed to be generated in Botswana. Every person who earns income must register for tax purpose, see registrationSecond schedule of Income Tax Act   exempts certain persons and income from tax. Click here to download FORMITA20/96.

Person
A person as described by ITA includes:

• Individual
• Companies
• Trust
• Partnership
• Pension Administrators
• And any other Juridical person
Tax Year
Tax year is a period of 12 months from 1st July to 30th June.

Value Added Tax

Value Added Tax (VAT) was introduced in Botswana with effect from 1 July 2002.VAT is an indirect tax levied on the supply of goods and services consumed within Botswana. It is called a consumption tax as the amount you pay is directly related to purchases you make. It is not a business expense because it is borne by the consumer.

Taxable Activity

Liability of VAT arises only when a person carries on a taxable activity. Taxable activity is defined as an activity which is carried on continuously or regularly by any person in Botswana, whether or not for profit, that involves the supply of goods or services to another person for consideration.

Taxable supplies – These include both standard rated supplies and zero rated supplies.
Standard rated supplies – These are supplies that are charged VAT at the rate of 12%.
Zero rated supplies – These are supplies that are charged VAT at the rate of 0%.

Exempt Supplies – These are not subject to VAT and are not counted as part of a person’s taxable turnover.

Registration – Any person making taxable supplies with a value of more than P500, 000 per annum must register for VAT purposes.

Input Tax – This is VAT paid to local suppliers or on imported goods subject to VAT and, it is allowed as a credit to a VAT registered person.

Output Tax – This is VAT charged by a registered person on taxable supplies.

Link to Botswana Unified Revenue Service Website