The annual Budget Speech is an opportunity for the government to share its financial priorities, plans, and forecasts.
These high-level policies affect every sector. This week we will be publishing daily insights into what our clients across the various sectors can expect in the 2023/2024 financial year.
For our first, we deep dive into Business Environment Reform (BER) in the property sector, a strategic priority area for Government due to the sectors potential to drive increased sustainable growth and investment.
- Property and Conveyancing
Property and Landowners can breathe a collective sigh of relief with the announcement of urgent amendments to the Transfer Duty Act, which can be expected to ease the backlog at the Deeds Registry office and the Botswana Unified Revenue Service.
For non-citizens especially, the challenge with the Transfer Duty Act 2018 was the imposition of a 30% transfer duty payable on property acquisitions. By example, if a non-citizen was purchasing property worth BWP 9 million, a duty of BWP 2.7 million was payable.
As we have seen across numerous transactions, these considerably high rates resulted in failed closures due to the distorted value placed on the property. We are hopeful the proposed amendments will result in some reprieve toward enabling foreign investment and business into the country.
- Special Economic Zones (SEZ)
SEZ’s remain a key government focus to attract foreign direct investment. As a developmental state, the private sector plays a critical role to increased economic activity through trade, capital and labour, all of which require an enabling environment for businesses and corporates. The rules applicable in SEZ are intended to boost
- economic development,
- create ease in doing business,
- increase FDI,
- increase employment and effective administration.
Importantly SEZ’s support export based business which can be utilised to take advantage of the market opportunities as prescribed in the African Continental Free Trade Area.
What you need to know about SEZ’s:
- Botswana has 8 SEZ’s namely; Sir Seretse Khama International Airport, Tuli Block, Lobatse, Fairgrounds, Pandamatenga, Greater Palapye, Francistown, and Selebi Phikwe.
- Agribusiness activities such as, manufacturing, warehousing distribution or logistic services can be established in SEZ’s.
- Ease of doing business is facilitated by a one-stop service centre for all licensing, permits, visas, provision of information and approvals
- SEZ’s licence holders enjoy 5% corporate tax benefits for first 10 years and 10% thereafter.