Botswana: Temporary reductions in VAT rates

Temporary reductions in VAT rates intended to mitigate rising cost of living for households

Temporary reductions in VAT rates intended to mitigate rising cost of living for household

The Minister of Finance announced the following temporary reductions in value added tax (VAT) rates—effective 1 August 2022 to 31 January 2023— intended to mitigate the rising cost of living for households:

  • Reduction in the standard rate to 12% (from 14%)
  • Reduction in rate on cooking oil and liquid petroleum gas to 0% (from 14%)

KPMG observation

There is a two-day discrepancy between the effective date as announced by the Minister and the date as stipulated in the statutory instrument—some tax professionals believe that the reason for this discrepancy is probably because there was a delay in the publication of the statutory instrument. In general, changes to VAT rates are typically effective from the beginning of the month or VAT-able period.

Tax professionals understand that most traders may have applied the reduced rates of VAT effective from 1 August 2022 (as announced by the Minister of Finance) and, accordingly, expect that the tax authority (in conjunction with the Ministry of Finance) will provide administrative and transitioning procedures to clarify and resolve the effective date issue.  

For more information, contact a KPMG tax professional in Botswana:

Leonard Muza |


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