Grant Thornton Acumen regional manager, North Aswin has said that the recent increase in civil servants' salaries coupled with hikes in fuel prices will put pressure on inflation. Aswin said that the stability of the Pula after devaluation would put lesser pressure on the important tradeables.
SELEBI-PHIKWE: Speaking during the Standard Chartered Bank's breakfast meeting with the Small and Medium Enterprises in Selebi-Phikwe recently, he stated that the prime rates are expected to go down. This will result in lower buying power while the cost of borrowing will go higher. He said there has been no change in the tax rate and VAT has become beneficial in that the list of exempt goods and services has been extended to include supply of passenger transportation, donations, grants and condoms. However, transportation of tourists by air, bus, safari vehicles and boats remain taxable. He said the definition of zero- rated items has been amended to incorporate millet and other farm products. Farming tractors will also be included under the zero rate.
"Specific rates regarding the time of supply in the case of transfer of immovable properties will be introduced. Input tax is to be extended to include the tax fraction of the value of the second hand goods acquired in respect of taxable suppliers or imports and the transfer duty paid on the acquisition of the immovable property." Aswin said the budget was aimed at prosperity and productivity to address grievances of inflation and VAT. He added that the current two tier taxation system for companies is proposed to be abolished and a single company tax rate and a withholding tax on dividend as a final charge is introduced. He lamented that the personal income threshold has increased to P30,000 and the maximum taxable limit for individuals increased to P120,000. He said the current status indicates that no changes and that marginal rate of tax for individuals has decreased.
"Withholding tax of 10 percent has been introduced for interest earned by residents in excess of P1,000 per quarter payable by banks and financial institutions. Certain exceptions apply to this provision." Aswin added
that a listed company trading 49 percent or more of its equity shares in Botswana Stock Exchange will be allowed to claim 100 percent exemption and no amendment has been passed. "Sale of shares in a company where
immovable property is the dominant asset will be treated as a sale of immovable property and taxed accordingly."
He said the current status indicates that there is no amendment and no transfer duty will be payable. He stated that the sale of principal private residence by an individual will be exempted only if its proceeds are
reinvested in a property used for residential purposes within two years from date of such sale. The Grant Thornton Acumen was addressing small and medium enterprise business owners who uses Standard Chartered
Bank. The event was meant to empower and equip them with information that would help them manage their businesses. The bank's official Cornellius Ramatlhakwana said they have moved closer to become partners with
small businesses. He stated that they want to influence their partners with technical know-how to offer the bank's customers minimal charge assistance.
This article appeared in Business Week on 13th June, 2006.