Botswana has reformed its tax compliance to meet global standards, according to the OECD, an organisation that promotes economic development and global trade.
OECD said reforming the business online registration system has catapulted the middle-income African country’s compliance. Botswana made significant progress when it adopted the exchange of information on request (EOIR) stands, particularly in terms of benefitial ownership information availability.
Botswana has moved from partially compliant to largely compliant with international standards on exchanging tax data partly due to its decision to introduce business online registration system.
In its latest report, the OECD highlighted Botswana’s legislative changes in 2022, aligning beneficial owner definitions and identification methods with international standards.
The catalyst for this success, the OECD said, has been Botswana’s Online Business Registration System, initiated in 2019, which seamlessly transitioned the manual registry of companies to a fully automated platform, making ownership, identity, and accounting information readily accessible online, according to the OECD.
OECD however pointed areas of improvement, particularly regarding the frequency of updates and the extension of anti-money laundering legislation to cover all legal entities.
“Botswana successfully responded within the imparted 90 days to the two requests received, demonstrating the effectiveness of its EOI unit’s procedures in addressing previous recommendations,” EOI said in its report seen by The Business Weekly & Review.
While Botswana’s experience in EOIR remains limited, “its overall compliance rating with the EOIR standard improved from the “Partially Compliant” rating obtained in 2019, to “Largely Compliant” for this latest assessment,” OECD report says.
The Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum) published this week new peer review reports on transparency and exchange of information on request (EOIR) for six of its members (Latvia, Mauritania, Pakistan, Poland, Serbia and Thailand), and supplementary reports that reflect progress made by two members (Botswana and Dominica) in implementing the EOIR standard.
It says more than half of the Global Forum members have now been fully reviewed in the second round of EOIR peer reviews and the ratings assigned are generally very good, with 88 percent of the jurisdictions obtaining satisfactory overall ratings (“Compliant” or “Largely Compliant”), 10 percent assessed as “Partially Compliant” and 2 percent as “non-compliant”.
In 2019, the Global Forum rated Botswana overall Partially Compliant with the international standard on transparency and exchange of information (EOI) on requests handled over the period from 1 January 2015 to 31 December 2017. Since its last report in 2016, Botswana has taken measures to address some of the deficiencies identified. Some important challenges remain, in particular to ensure the availability of accounting information, as well as taking steps to ensure the availability of beneficial ownership information. Botswana should also implement effective supervisory programmes to ensure these types of information are kept in practice and monitor the implementation of recently enacted laws (e.g. on transparency of trusts).
The Global Forum is a leading multilateral body mandated to ensure that jurisdictions around the world adhere to and effectively implement both the EOIR standard and the standard of automatic exchange of financial account information. These objectives, the organisation said, are achieved through a robust monitoring and peer review process. The Global Forum also runs an extensive technical assistance programme to support its members in implementing the standards and help tax authorities make the best use of cross-border information sharing channels.
