Offers tax incentives in special economic zones
22 Oct 2021
Botswana promulgated Statutory Instrument 89 of 2021 [Income Tax (Special Economic Zones Development Approval) Order, 2021] on 22 October 2021, which gives effect to the income tax incentives that are available to investors and developers operating in special economic zones (SEZs). The Order stipulates that income accruing to an investor or developer from SEZ-licensed operations is to be taxed at a special rate of 5% for the first 10 years of operation in a SEZ and 10% thereafter. Other commercial and fiscal incentives available to licensed developers and investors include VAT exemption on purchases of raw materials for use in manufacturing of goods for export, no exchange controls, full repatriation of profits and capital, waiver on transfer duty on land and property, and duty-free imports of specialist plant and machinery for manufacturing purposes. SEZ incentives are available to:
(i) An investor who: (a) has been licensed by the SEZ Authority to conduct business in SEZ, or b) exports 100% of goods or services (or has been exempted from the 100% requirement by the Minister for Trade and Industry in terms of the SEZ regulations), or (c.) undertakes within a SEZ, any of the approved development project or activity, and has been granted the tax relief by the Minister.
(ii) A developer (a) Who has a right over land in a SEZ, held for purposes of development of SEZs infrastructure through privately obtained funding of his/her own, or (b) Who draws from his/her networks to bring in other investors to be licensed in and operate their businesses from the SEZ which he/she will be responsible for managing, and who has been granted the tax relief by the Minister.
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Type:
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Promotion and facilitation (Investment incentives, Special economic zones)
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Industry:
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