Find Accountancy, Audit and Tax expertise in Botswana
There are around 20 accountancy and audit firms in Botswana (2006), including affiliates of the large international accountancy groups. Companies incorporated in Botswana are required to prepare annual financial statements. The Companies Act requires that companies with turnover above BWP 10 million and total assets in excess of BWP 5 million, adhere to International Financial Reporting Standards (IFRS). The Botswana Accounting Oversight Board was established by the Financial Reporting Act, in order to review the annual financial statements of all public interest entities and regulate auditors of the same. In 2011 the Botswana Institute of Chartered Accountants established an Accounting Framework for Small and Medium Enterprises, which is voluntarily adopted by companies below the threshold which necessitates IFRS compliance. In the World Economic Forum’s Global Competitiveness Report (2012-13) Botswana came 50th in the world (out of 144 countries) for the strength of its auditing and reporting standards. Its value of 4.9 out of 7 placed it above the world mean of 4.6. In the 2011 World Bank’s Ease of Doing Business Index the country placed 28th in the world for resolving insolvency, the highest ranking for a sub-Saharan nation, compared to, for example, South Africa in 77th place.
The Botswana Institute of Accountants is the professional body; its members all hold foreign accountancy qualifications, most them having qualified under the Association of Chartered Certified Accountants (ACCA) of the United Kingdom. Many practicing accountants in the country are expatriates. Anyone who wishes to practice as a Certified Public Accountant has to be a member of the Institute and posses a practicing certificate from the Council. In June 2012 the Institute recorded 170 fellow chartered accountants, 68 fellow certified professional accountants, 375 associate chartered accountants, 243 associate certified professional accountants and 53 certified auditors.
Income tax in Botswana is progressive, rising to 25% for incomes above BWP 120,000 (tax year 2010-11). The tax year 2010-11 also saw the rise in the non-taxable threshold for resident individuals from BWP 25,000 to BWP 30,000 per year. The standard rate of company tax is 25%; it is 15% for manufacturing companies and companies recognised as offshore enterprises by the Botswana International Financial Services Centre (IFSC). These corporate tax rates are the lowest in the Southern African Development Region (2010-11). There are a number of other corporate tax incentives for Botswana IFSC Companies, including exemption from withholding taxes on interest, dividends, commercial royalties and management or consultancy fees. The country has encouraged a low taxation environment for some years in order to develop inward investment and expansion by local business. The standard rate of value added tax in Botswana in 10%. The country ranked 22nd in the world in relation to paying taxes in the Ease of Doing Business Index, two places above the United Kingdom. In the Global Competitiveness Report it came 13th in the world in relation to its total tax rate, with a value of 19.4% compared to South Africa’s of 33.3% (48th), reflecting its low tax environment.