Botswana has DTAAs with 21 countries

Botswana has 21 Double Taxation Avoidance Agreements ( DTAAs) currently in Force, the Minister of Finance Peggy Serame has told Parliament. In simple terms, DTAAs are agreements that the country signs with other countries to ensure that there is no tax avoidance or to ensure that Botswana companies are not taxed twice when they do business. The countries with which Botswana has concluded and finalised DTAAs are South Africa, Sweden, Mauritius, France, Namibia, Seychelles, Barbados, United Kingdom, Zimbabwe, India, Russia, Mozambique, Zambia, Ireland, the Kingdom of Eswatini, China, Malta, the Kingdom of Lesotho, Luxemburg, Czech Republic, and the United Arab Emirates. Botswana has concluded and ratified three DTAAs with Malawi, Kenya, and Belgium, but they are not yet in force. They were ratified in July 2016, February 2018, and November 2018 respectively. Minister Serame indicated that they are currently, awaiting Malawi, Kenya, and Belgium to ratify on their side. “We have been making follow- ups with these countries through diplomatic channels for their ratification,” she added. She said minimum standards are compliance standards for the global forum of which Botswana is a member. It remains obligatory, therefore, for Botswana and Kenya as a member to comply with minimum standards in all her DTAAs, she stated. According to the Minister they are yet to receive feedback, on ratification from the other two countries, and “we will continue to make follow- ups through diplomatic channels in an effort to bring the DTAAs into force. Serame added that they have identified other countries for DTAA negotiations, and are currently negotiating with South Korea, Rwanda, and Japan. The criteria we used to identify countries with which to negotiate Double Taxation Avoidance Agreements revolve around Botswana’s economic and political relations or interests with a particular country. She said that in selecting a country to negotiate a DTAA they look at a number of potential benefits that the treaty may provide and these include; trade opportunities between Botswana and the partner country; prospects to attract Foreign Direct Investment ( FDI); possibilities to attract inbound transfers of technology or skills, and to improve coordination and cooperation between tax authorities in order to address tax avoidance or evasion, and through the exchange of information for tax purposes or through a mutual agreement.

However, Serame said that the ministry has not conducted any costbenefit analysis of the DTAAs in force to date. But this has not impeded Botswana from realising some benefits from its expansion of the DTAA network. She said the DTAAs have created certainty for taxpayers in contracting states in that their income is not being taxed twice. They have enabled contracting states to exchange tax information, as well as promote economic and diplomatic relations between the countries in question.

“One such example, of a DTAA is between us and Zimbabwe whose rate for partial income has been set at a rate of 10 percent whereas the normal rate would be 15 percent. So that goes just to show how some of the benefits we accrue from such treaties”, the Minister explained. Serame was responding to a question from MP for Kanye North Thapelo Letsholo who asked among others, the number DTAAs that Botswana has that are in force; the countries with which Botswana has concluded and finalised these DTAAs; if there are any DTAAs that have been concluded and are not yet in force, if so, why are those DTAAs not yet in force and what efforts are being made to finalise and bring them into force.