Botswana: Increase in tax-exempt thresholds for pensions, gratuities and retrenchment packages
Income Tax Act (Cap. 52:01) amended with effect from 15 January 2024
Income Tax Act (Cap. 52:01) amended with effect from 15 January 2024
The Income Tax Act (Cap. 52:01) was amended with effect from 15 January 2024 to increase the exemption thresholds of pensions, annuities, bonuses, gratuities and payments in commutation of pension or annuity entitlements as listed below:
- Approved service gratuity or severance pay—from 33.33% to 50%
- Contractual bonuses or gratuity—from 33.33% to 50%
- Statutory severance—from 33.33% to 50%
- Retrenchment packages—from 33.33% to 50%
- Payments in commutation of pension or annuity entitlements—from 33.33% to 50%.
- Annual pensions or annuities—from P5,000 to P20,000 per year
The increase in the tax-exempt thresholds provides relief for taxpayers (especially senior citizens) as this increases their disposal incomes and offers a significant cushion against the high inflation experienced in recent years.
For more information, contact a KPMG tax professional in Botswana:
Leonard Muza | leonard.muza@kpmg.bw
Kenneth Sakonda | kenneth.sakonda@kpmg.bw
Virginia Mutsago | virginia.mutsago@kpmg.bw
Onkarabile Charles | onkarabile.charles@kpmg.bw
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