The Income Tax Bill No. 36 of 2025 which was gazetted on the 15th of December 2025 will, on commencement, introduce a new Withholding Tax (WHT) on what it calls natural resource amount. The said Bill was passed by Parliament in the week ending 18 April 2026 and it is expected to commence as from the 1st of July 2026. Currently, the country does not have a withholding tax on natural resources amount. In this article, words importing the masculine shall be deemed to include the feminine.
The New Tax
The tax to be introduced by the new law will basically be referred to as Withholding Tax on natural resource amount. According to the Act, these are amounts which are payable or paid to a non-resident person in respect of the rights to exploit natural resources (whether living or non-living) which are based in Botswana. Withholding taxes are a form of taxation where income is taxed at source before payments are made to a payee. As an example, if a company is making a payment of P 1 000 000 to a non-resident of Botswana and it has to deduct WHT at 15 percent, it will then deduct P150 000 from the payment and remit the balance, being the P 850 000, to the payee. Going back to the WHT under discussion, the tax rate shall be 15 percent and it will only apply in instances where payments are made to a non-resident of Botswana.
The Act basically refers to the natural resource amount as any fee which is paid by a resident of Botswana in respect of the rights to exploit a natural resource which is based in Botswana. Natural resources include minerals, trees, forests, plants and insects, among others. It is our view that this WHT is meant to apply on royalties that are paid to non-residents of Botswana who own, for example, prospecting and/or mining licenses but who don’t intend to mine the resources. Further, we opine that this WHT will apply to non-residents who allow residents of Botswana to exploit resources such as sand, water, and stones for a fee.
The application
Any payer of a natural resource amount shall be required to deduct 15 percent tax and remit the amount to BURS. The 15 percent WHT rate cannot be reduced by a Double Taxation Avoidance Agreement as there is no article that speaks to such fees. The closest article that speaks of such fees will be the WHT on commercial royalties, but it will not apply as this relates to natural resources.
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