BURS introduces new digital VAT on June 1

The Botswana Unified Revenue Service (BURS) is expecting to rake in an additional P450 million annually when it officially introduces Value Added Tax (VAT) on remote digital services on June 1. The upcoming tax regime, which aims to broaden the national tax base and capture revenue from the rapidly expanding digital economy, was detailed by BURS leadership during a media engagement in Gaborone on May 27. “The rapidly expanding digital economy requires tax systems that are responsive and equitable.

This initiative seeks to ensure that both resident and non-resident suppliers of services consumed in Botswana are taxed fairly and effectively,” she said. Highlighting the global context, Ms Lesedi added that Botswana was aligning with an international trend of nations updating tax laws to capture revenue from foreign digital companies operating without a physical presence. She emphasised that the revenue collected would contribute directly to national development and improving local livelihoods.

For her part, BURS acting commissioner for domestic taxes, Ms Segametse Radibe-Michael, explained that the reforms would legally require non-resident digital suppliers to register for VAT and collect the tax from Botswana consumers. Ms Radibe-Michael said the framework also introduced a reverse charge mechanism, requiring VAT-registered local businesses and certain government entities importing services to self-account for the tax. She added that such would not only boost revenue but also tighten compliance and hand government better data on imported digital services.

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Again, she said BURS officials would continue stakeholder consultations on compliance and operational procedures up until the June launch to ensure a smooth rollout. Meanwhile, following the official June 1 implementation, affected foreign businesses would be granted a four-month transitional grace period for system adjustments and registration before active tax collection is strictly enforced later this year.ENDS

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