The Botswana Unified Revenue Service (BURS) says recent legislative changes to Value Added Tax (VAT) administration form part of a broader strategy to expand the tax base and boost revenue mobilisation.
Parliament recently passed theย VAT (Amendment) Bill, 2025, introducing VAT on Remote Services, a Reverse Charge mechanism for VAT-registered persons, and an E-Billing solution.
Boikanyo Mathipa, Deputy Secretary for Financial Policy at the Ministry of Finance, explained that these changes are part of a larger tax reform. โThe government will soon introduce a Tax Administration Bill under which all administrative issues โ including income tax and VAT โ will be consolidated,โ she said at a media briefing this week.
โThe purpose of these recent changes is to improve the fiscal situation of the country,โ Mathipa said. โThe current VAT system mainly focuses on physical goods and locally supplied services; this bill introduces provisions to mobilise revenue while we prepare the bigger VAT Bill.โ
Mathipa noted that the changes will not only apply to digital services but also to professional services provided by non-residents. โIf you hire an advocate from South Africa, for example, you will have to pay VAT. We do not want a situation where services from outside are cheaper simply because VAT is not applied,โ she said.
Previously, a self-charge mechanism existed but was not clearly defined in law. The new legislation will formalise this, requiring foreign service providers to register for VAT in Botswana, as local providers do. Remote services will cover both digital and non-digital offerings.
For digital services such as Netflix, consumers will now pay the 14 percent VAT. โVAT is a consumption tax paid at the point of consumption,โ Mathipa said. โBecause consumers are the ones consuming the service, they bear the cost.โ
Mathipa added that discussions are underway to impose income tax on revenue generated by tech giants within Botswana. โCurrently, Botswana charges income tax only on revenue generated within our borders,โ she said. โWorldwide taxation โ where citizens declare and pay tax on income earned globally โ is not yet adopted here, but we may consider it in the future.โThe reverse charge provision places the responsibility to account for and pay VAT on the recipient of the service. โIf the University of Botswana hires a lecturer from abroad, the University must charge itself VAT and remit it to BURS,โ Mathipa explained.
BURS will soon roll out an e-billing system to enhance VAT collection. The system will integrate with taxpayersโ existing systems, ensuring real-time issuance of invoices, which will be transmitted directly to BURS.
Tom Dikoloti, Acting General Manager Compliance โ Large Tax Unit, said: โThis system will give BURS real-time access to business transactions, speeding up audits and ensuring timely refunds.โ Businesses without billing systems will be required to adopt one at their cost.
BURS is finalising regulations for the e-billing solution, which are expected soon. The changes passed in August are slated to take effect around March or April next year.
