Botswana says it will broaden its domestic revenue base to complement the external sources of fiscal revenue.
Its Finance Minister, Thapelo Matsheka, disclosed this while presenting the country’s annual budget on Monday.
He explained that in order to broaden the domestic revenue base, the rate of value-added tax would be increased from 12 per cent to 14 per cent with effect from April 1, 2021.
According to Matsheka, some of the measures to support the country’s finances include a proposed fuel levy to be increased and withholding tax on local dividends to be increased from 7.5 per cent to 10 per cent, coupled with an increase in the minimum taxable threshold for individuals.
The minister noted that the move would help the government achieve its goal of fiscal stability.
“Achieving fiscal sustainability requires a range of actions, such as improving domestic revenue mobilisation, trimming government spending to align it with the new, lower level of government revenues, making sure that government spending is productive and efficient; rebuilding the financial buffers that have been largely depleted; and ensuring that the borrowing necessary to finance budget deficits is kept to modest levels,” Matsheka said.
He added that for the financial year 2021/22, a deficit was anticipated expected to be financed through the issuance of domestic government securities and external borrowing.
