Compliance fees are putting small businesses at a competitive disadvantage, with company annual returns and restoration charges significantly higher than those in some regional markets, according to the Small Business Association of Botswana Trust.
Operating a small business in Botswana can cost up to three times more than in some Southern African Development Community (SADC) countries, with company compliance fees emerging as a major burden on struggling entrepreneurs, according to the Small Business Association of Botswana Trust (SBABT).
In a report released recently, the association says Botswana’s P500 annual company returns fee is two to three times higher than comparable charges in some SADC countries, putting local businesses at a competitive disadvantage.
The report comes amid a Companies and Intellectual Property Authority (CIPA) directive that companies and businesses that had not submitted their constitutions by the September 30, 2026 deadline would be removed from the register in accordance with the law.
Comparing compliance costs in Botswana, Lesotho, Namibia, Zambia, Eswatini and South Africa, SBABT argues that Botswana’s fee structure undermines efforts to promote entrepreneurship, create jobs and diversify the economy.
According to the association’s calculations using January 2026 exchange rates, the annual returns fee is approximately P190 in Lesotho, P232 in Namibia and P184 in Zambia.
Botswana charges P500 for the same requirement, more than double Namibia’s fee and nearly three times the amounts cited for Lesotho and Zambia.
The disparity is even greater when companies seek restoration after deregistration. Botswana charges P2,500, compared with approximately P114 in Lesotho and P863 in Zambia, the report states.
SBABT argues that the charges are particularly damaging to micro-enterprises operating on thin margins amid declining consumer spending, limited access to affordable finance, rising operating costs and the lingering effects of the COVID-19 pandemic.
Businesses also face an additional P500 fee to file company constitutions as part of compliance with Financial Action Task Force requirements, the association says.
This brings the combined cost of annual returns and constitution filing to P1,000, excluding other operating and regulatory expenses.
For a micro-enterprise generating less than P200,000 in annual revenue, SBABT estimates that the two requirements alone can consume between one and two percent of turnover.
The consequences of non-compliance are another concern. The report says companies risk removal from the register after 10 days of late filing, potentially leaving them liable for a P2,500 restoration fee.
SBABT warns that such penalties could push financially distressed businesses further into difficulty rather than encourage compliance.
The association also argues that compliance costs contribute to thousands of informal businesses remaining unregistered, undermining efforts to broaden the tax base and strengthen the formal economy.
It questions the sustainability argument reportedly advanced by CIPA, which has maintained that existing fees are subsidised and fall below the actual cost of providing services.
SBABT contends that lower charges could encourage more businesses to register and remain compliant, potentially offsetting reduced fees through higher compliance volumes and broader economic activity.
The association petitioned CIPA on March 24, 2025, seeking reductions in annual returns fees, restoration charges and penalties. Its report says the authority rejected the request in a response dated April 28, 2025.
Among its proposals, SBABT wants annual returns fees to be tiered according to company turnover, with micro-enterprises paying P150 instead of P500. It also proposes reducing the constitution-filing fee or waiving it for smaller businesses.
The association further recommends extending the grace period before deregistration from 10 days to at least 60 days, allowing instalment payments and granting temporary relief to eligible small businesses.
It has called on the government to establish a working group involving CIPA, the Ministry of Finance and business associations, alongside an independent assessment of the costs and benefits of reducing fees.
Aligning Botswana’s compliance costs more closely with regional levels would support entrepreneurship, protect jobs and improve the country’s competitiveness, the report argues.
