While overall tax collections by the Botswana Unified Revenue Service (BURS) exceeded the target by 4.08 percent in the 2024/25 financial year, nearly 45 percent of the revenue came from the Southern African Customs Union (SACU), which emerged as the primary contributor.
However, a heated debate has emerged over whether this segment’s overperformance should be attributed to BURS. Critics argue that SACU revenue is determined by South Africa and allocated based on the Ministry of Finance forecasts, factors unrelated to BURS’ own collection efforts.
In contrast, Income Tax, which accounts for 31.06 percent of total collections and is a core responsibility of BURS, underperformed significantly, falling short by P1.745 billion.
VAT on the other contributed 23.66 percent, which experts argue is a key segment showing true operational success, outperforming its target by 28.15 percent.
Preliminary accounts shared by BURS indicate that the net tax revenue collected as at 31st March 2025 amounts to P61.097 billion, surpassing the target of P58.704 billion by P2.393 billion (4.08 percent).
The positive outturn was primarily driven by positive collections in Value Added Tax (VAT) and Southern African Customs Union (SACU) receipts, which BURS said it offset a shortfall in Income Tax collections.
According to the tax collector, SACU receipts clocked in at P27.566 billion — nearly half of total tax collections — and were P855 million above target, representing 103.20 percent performance.
This good performance is due to favourable exchange rate, Commissioner General Jeanette Makgolo said during a press conference recently.
SACU receipts do go to BURS. However, much of this has less to do with the enhanced collections the tax collector had embarked on.
They are disbursed by South Africa based on the Ministry of Finance forecasts. Then Botswana pays back the difference between actual and what it had budgeted for, which also comes from the national budget and not necessarily BURS.
Income tax, on the other hand, has reflected real collection challenges and underperformance, the segment BURS actually controls.
Income Tax fell short by P1.745 billion, performing at just 91.58 percent, according to Makgolo, who shared that actual collections reached P18.968 billion against a target of P20.714 billion.
She said this underscored the continued need to strengthen compliance and enforcement efforts in this tax type.
“The underperformance in this category can be attributed to challenges in the mining sector, including low global demand for diamonds, unfavorable diamond prices, and stockpiling by diamond dealers.” She said, adding that non-mineral income tax poor performance can possibly be attributed to subdued domestic economic activity, contraction in taxable profits, and emerging challenges in tax compliance.
VAT overperformed (+28.15 percent), showing consumer resilience. It exceeded its target by recording P14.455 billion against a target of P11.280 billion. This collection surpassed the target by P3.175 billion or 28.15 percent. This outstanding performance suggests resilience in domestic consumption, Makgolo said.
Tax experts view that the performance of collection masks the fact that BURS’ actual collection segments had mixed results, with SACU receipts doing the heavy lifting without reflecting improved institutional effort.
For the Financial year 2025/26, the government has entrusted BURS with collecting a total amount of P60.475 billion.
