General Terminologies (VAT)

Goods

It includes all kinds of moveable and immovable property.

Taxable Activity

Any activity which involves supply of goods or services to a registered person for a consideration liable for levy of VAT on transactions within Botswana and imports.

Input Tax

It is the VAT paid:

• On taxable purchases made within Botswana from local suppliers

• On Imported goods subject to VAT

Output Tax

It is the tax charged on taxable sales.

Tax Rates

The two rates of taxes levied are standard rate of 12% and zero rate.

Exempt Supplies

Under Section 11 the following goods and services are exempt from VAT:

• Financial services

• Prescription drugs and services in a public medical facility

• Education services

• Accommodation supplied by the employer to the employee as a benefit of employment

• Leasehold land by way of lease

• Services to members of an association by the association

• Apply of any goods or services by the State, a local authority or an association not for gain

• Certain imports are also exempt from VAT

• Residential rental

Taxable Supplies

It is defined as everything which is not an exempt supply. The VAT liability on sales arise only on making taxable supplies.

Zero Rated Supplies

Zero rated supplies are taxable supplies with a tax rate of zero percent. It is claimable as an input tax deduction. Zero tax rate is applicable under section 10 on:

• Goods and services exported from Botswana

• International transport services

• Sorghum or maize meal

• Goods or services supplied for personal or official use of the President or any dependent member of the President's family.

• Petrol, diesel and illuminating paraffin

VAT Registration Number

It is the Registration Number issued by the Director of VAT at the time of Registration. This needs to be quoted in every return, notice and any other document where the registration details are to be provided.

Tax Invoice

Tax invoice is required to be issued by Registered Person for taxable supplies made by another Registered Person. This invoice needs to be produced by the Registered Person for the claim of input tax credit.

VAT Registered Person

This term is used to identify a person who is registered under VAT and has taxable supplies of P 500,000 and above per annum.