Botswana Corporate Income Tax Guide 2026

Overview — Corporate Taxation in Botswana

Botswana offers one of the most competitive corporate tax regimes in Africa. The standard CIT rate is 22%, lower than the global average and significantly below most peer economies. The tax system is territorial — companies are generally taxed on income sourced in Botswana. A branch profits tax of 22% applies to foreign branches operating in Botswana. Botswana does not impose a separate capital gains tax on share disposals by companies (CGT applies only to land/buildings).

Standard CIT Rate — 22%

The standard corporate income tax rate is 22% of chargeable income for all companies not qualifying for a preferential rate. Chargeable income is calculated as gross income less allowable deductions. Deductions include all expenses wholly and exclusively incurred in the production of income, including interest, rental, salaries, depreciation (capital allowances), and amortisation of intangibles.

Preferential CIT Rates

Botswana offers reduced CIT rates to encourage investment in priority sectors:

• Manufacturing: 15% CIT for qualifying manufacturing companies
• Agriculture: 15% CIT for qualifying agricultural activities
• International Financial Services Centre (IFSC): 10% CIT for licensed IFSC entities (reduced from standard 22%)
• Mining: Variable rates depending on mineral type — diamond mining typically 5–10% royalty plus standard CIT; other minerals vary by agreement

Manufacturing and agriculture incentives may require prior approval from the Minister of Finance and must meet local content or employment criteria.

Capital Allowances (Depreciation)

Capital allowances are available on qualifying capital expenditure at prescribed rates:

• Industrial buildings: 2.5% per annum (straight-line)
• Commercial buildings: 2% per annum (straight-line)
• Plant and machinery: 10–25% per annum (declining balance) depending on asset class
• Motor vehicles: 25% per annum (declining balance)
• Computer hardware and software: 33.3% per annum (straight-line)
• Intellectual property: Amortised over the useful life

Group Relief and Losses

Botswana does not permit group relief or loss consolidation between related companies. However, trading losses can be carried forward indefinitely until fully utilised against future profits. Losses from a business carried on outside Botswana cannot be offset against Botswana-source income. A change in ownership of more than 50% may restrict loss utilisation if the business continues in the same trade.

Withholding Taxes on Corporate Payments

Companies making certain payments must withhold tax at source:

• Dividends: 15% to non-residents (0% to resident shareholders)
• Interest: 15% to non-residents (0% to residents)
• Royalties: 15% to non-residents
• Management and consultancy fees: 15% to non-residents
• Contract payments: 5% on payments to non-resident contractors

Rates may be reduced under applicable double taxation treaties (DTTs).

Filing and Payment

Corporate tax returns are due within 11 months after the end of the financial year (e.g., a company with a December year-end files by 30 November). Provisional tax is payable in two instalments: the first within six months of the start of the tax year, and the second at year-end. Late filing attracts a penalty of 10% of tax due plus interest at 1.5% per month.

FAQs

What is the effective corporate tax rate in Botswana?

The standard CIT rate is 22%. There is no surtax or additional corporate levy, making the effective rate equal to the statutory rate for most companies.

Can foreign companies claim treaty benefits?

Yes, Botswana has over 15 double taxation treaties in force, including with the UK, India, South Africa, Namibia, Zimbabwe, and Zambia. Treaty benefits must be claimed through the appropriate BURS procedure.

Is there a minimum tax?

Botswana does not impose a minimum corporate tax. Companies that make losses are not required to pay CIT, though filing obligations remain.

Disclaimer

This guide provides general information about Botswana corporate tax for 2026. Tax laws and rates may change. Always consult a qualified tax professional or BURS for advice specific to your business. InvestmentKit does not provide tax advice.