Volume 54 Issue 6- June 2016 : Others

The Income Tax (Amendment) Bill 1987 received another heated debate this week at it went through the Committee Stage.

Although the bill was blessed from all sides several back benchers felt that it was not fair for the Botswana Meat Commission (BMC) to be taxed on gross income and to raise the rate of taxation to 40 percent. 

The BMC  is at present taxed at 35 percent and in terms of the amendment the rate of tax is being raised to 40 percent.

 The member of Parliament for Moshupa, Mr E.S Masisi moved a motion requesting that the rate of tax for BMC be left at 35 percent and he was supported by several MPs. 

They argued that that taxing the BMC was in fact placing more burden on cattle producers because the payment was done by the producers themselves. The motion was however defeated.

Presenting the Bill last week, the Vice President and Minister of Finance and Development Planning Mr Peter Mmusi recalled that in the Budget Speech in February he informed the House of his intentions to effect effect some reforms in the Income Tax Law within the 1987/88 tax year.

He said the Key areas were simplification of the system, disaggregation of the incomes of spouses, reduction of the tax burden of resident individuals and the raising of the Company Tax to 40%. 

Mr Mmusi explained that the Bill would be complemented at a later date by legislation on generalized sales tax and abolition of local government tax.

In terms of this amendment, he said a married woman would become a tax payer on her own right and entitled to all the rights and subjected to all obligationsand liabilities of a tax payer.

 He said the sex of a married individual would cease to have relevance for tax purposes and where both spouses of marriage have taxable income, each would be treated as a single person and taxed separately under table one.

Where there is only one breadwinner in a marriage, the taxable spouse will be taxed under table two which is less than table one, he explained.

Mr Mmusi said provision would be made to grant tax relief in the cases where one spouse was liable to tax while the other had a small income well below the taxable limit.

Another simplification as stated by him is that the majority of the employees will have their tax deducted from their monthly salaries as the final tax and will be excused from filling the annual tax returns and assessment will not be made on them.

He explained that only those who have other sources of income or derive fringe benefits would be required to submit tax returns. The need for submission of tax returns will include those who are entitled to the allowance for home loan interest or tax relief, he said.

 Mr Mmusi mentioned that the tax rates for individual persons had been lowered comparatively and the the magnitude of the reductions were a relief to a Motswana taxpayer.

He said education, medical, and insurance allowances were integrated in the structure of the tax rates.

The Minister for Presidential Affairs and Public Administration, Mr Ponatshego Kedikilwe commented that Batswana deserved to be thanked and praised for having cooperated with government during times of difficulties. He said the have always paid tax as required and at one time public servants have had to go for some time without salary increament. ENDS

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