Various tax revisions concerning individual income tax, company tax and the sales tax were featured in the 1995 Budget Proclamation of Botswana. This paper examines these tax revisions and their implications for individuals and businesses. It is concluded that, although the reductions in the individual income tax appear to benefit some individuals more than others, they do not generally erode the progressivity inherent in the tax structure. Consequently, the burden of the tax continues to fall more on higher income groups than on lower income groups. With regard to the company tax concessions, such concessions, which are substantial by any standard, could serve as a complementary factor to other strategies used to encourage investment. Finally, with regard to the sales tax changes, despite the broadening of the tax coverage and the raising of the tax rate applicable to certain products, selectivity of the tax is maintained, with the result that the income distribution effect of the tax remains not regressive overall.
Read
