Government harmonises tax administration through proposed legislation

The government has taken a step to streamline tax administration with the introduction of the Tax Administration Bill (TAB), which also proposes the establishment of a Tax Tribunal. Vice President and Finance Minister, Ndaba Gaolathe, told Parliament this week that the TAB is expected to enhance the ease of doing business by reducing taxpayer compliance time and eliminating duplication in the filing of returns and payment of taxes. To improve user-friendliness, Gaolathe said the Bill introduces definitions for new concepts recently incorporated into the domestic tax system, including the Electronic Billing System. The Electronic Billing System will be used by VAT-registered persons to record and transmit sales and related transaction data. The Bill provides for the registration of taxpayers and is structured into three divisions. “The registration requirements apply uniformly across all tax types,” Gaolathe said. “In addition, the Bill establishes general rules for record-keeping, requiring taxpayers to maintain records in Botswana to ensure accessibility for audits or investigations. These records must be preserved for eight years.” On the filing of tax returns, Gaolathe explained that the obligation to file will remain in the respective legislation—either the Income Tax Act or the Value Added Tax Act—depending on the tax concerned. “The Bill sets out general rules on approved forms and enables electronic filing, which will be governed by overarching regulations,” he said. “It also provides for the filing of advance returns in special circumstances, such as when a taxpayer permanently leaves Botswana or in the event of a taxpayer’s death.” The Bill further provides for various types of tax assessments, including self-assessments, estimated assessments issued when a taxpayer fails to file a return, advance assessments and amended assessments. It also recognises the role of registered tax agents, who may assist taxpayers in preparing their self-assessments. “A taxpayer may only self-amend a self-assessment to increase their tax liability,” Gaolathe said. “In all other circumstances, the taxpayer must apply to the Commissioner General for an amendment.” The TAB establishes three categories of decisions by the Commissioner General: tax decisions, appealable decisions, and those subject to judicial review, such as distress proceedings or seizure of goods, where a taxpayer may seek an injunction. The Bill also requires the Commissioner General to provide reasons for any decision made. Importantly, the time limit for challenging a decision will only begin once those reasons have been communicated to the taxpayer, Gaolathe explained. A key provision of the Bill is the establishment of a Tax Tribunal to hear appeals from taxpayers aggrieved by decisions of the Commissioner General. Under the current framework, this function is performed by the Board of Adjudicators, whose secretariat is housed within the Ministry of Finance—an arrangement Gaolathe said limits its institutional independence. The Tribunal’s mandate will extend to appeals on customs matters. To strengthen independence and effectiveness, the Chairperson of the Tribunal will serve on a full-time basis. This is expected to promote impartial decision-making, expedite hearings and help attract and retain expertise through competitive, market-aligned remuneration. The Bill also provides for the collection and recovery of tax, structured into three divisions: payment of tax, late payment interest and recovery of unpaid tax. On late payment interest, the Bill seeks to compensate the government for the loss of funds resulting from delayed payments. This interest will be imposed at market-based rates and calculated on a simple interest basis. Late payment interest is separate from penalties, which serve as a sanction for non-compliance. The Bill also streamlines the process for issuing refunds to taxpayers with excess refundable tax credits, ensuring that such refunds are made on a timely basis. A separate process is предусмотр for refunds arising from overpaid tax in other circumstances. It further provides for the release of tax liabilities in cases of hardship and the write-off of bad tax debts in the Revenue Service’s financial accounts. The legislation includes provisions on information collection, covering investigative and enforcement powers such as access to premises and inspection of records. Under these provisions, the Commissioner General is empowered to seize data storage devices, capturing a wide range of technologies beyond traditional computers to facilitate investigations.The Bill also authorises joint audits covering both customs duties and domestic taxes. In addition, it provides for the issuance of tax clearance certificates, specifies their validity period, and allows for their revocation where a taxpayer is not substantially compliant or defaults on agreed payment arrangements. The introduction of the Tax Administration Bill marks the culmination of a decade-long effort to holistically review the Income Tax Act and the Value Added Tax Act. The TAB, published in the Government Gazette on 15 December 2025, seeks to harmonise, modernise and consolidate the administrative provisions drawn from both pieces of legislation.

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Government harmonises tax administration through proposed legislation

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