As published on news.thevoicebw.com, Wednesday 5 August, 2020.
The amendment of the Income Tax Act, expected to be debated during the current sitting of parliament, is meant to deter tax evasion and money laundering.
The bill, published in the government gazette in April, seeks to amend section 5(4) A of the Income Tax Act to make it clear that the country will still be able to share tax information with any other country.
According to Jonathan Hore, a tax consultant at Aupracon Tax Specialists, the new bill seeks to make Botswana more transparent.
“The amended Income Tax Act will override any law which may provide for secrecy in information sharing when requested by another country,” explained Hore.
He believes the bill is a step forward in the country’s drive to increase tax transparency through sharing information with other countries.
“It comes at a time when the country amended the Income Tax Act back in 2012 to provide for it to enter into international treaties called Exchange of Tax Information Agreements with other countries,” said Hore.
Botswana has in the past been labeled a ‘tax haven’ and, while the country has repeatedly denied this, Hore says the introduction of tax information sharing will help shrug off this unwanted title.
“Most developed countries shun nations listed as tax havens as they regard them as promoters of harmful tax practices, which include tax secrecy,” said Hore, adding that Botswana has since entered into several Tax Information Agreements to shrug off the tax haven tag.
The bill is expected to allow for enhanced tax transparency and international exchange of tax information, regardless of what other statutes may prescribe.
It also comes at a time when Botswana prepares to become a member of the Organization for Economic Cooperation and Development (OECD) Convention on Mutual Administrative Tax Assistance in tax matters, which will help in the war against tax secrecy.
Hore said the amendment should also improve Botswana’s rankings from a tax transparency perspective, which is a key factor in attracting Foreign Direct Investment (FDI).
“With the country currently blacklisted under the European Union (EU) money-laundering protocols, the amendment is likely to herald the country’s resolve to remain transparent and also abide by the OCED convention on mutual tax assistance,” highlighted Hore.