The first day of April is an annual custom consisting of practical jokes and hoaxes. During April Fool’s Day or April Fools’ Day, Jokesters often expose their actions by shouting “April fool’s!” at the recepient. It is a wish of almost every Motswana to hear that price increments issue is just another prank.
Today, the first day of April 2021 marks exactly three (3) years since His Excellency President Dr. Mokgweetsi E.K Masisi ascended to the highest seat in the country. In commemoration of the day, President Masisi’s government decided to slap the nation with numerous tax increments and introduction of some.
Despite the fact that most of the inhabitants of the country has suffered an excruciating financial and economic backlash due to the effects of Corona Virus Disease (COVID-19) pandemic, the government has found it fit to save its own skin at the expense of the already limping nation. Even though companies are not allowed to retrench during the State of Public Emergency (SoE), the Minister of Finance and Economic Development- Dr. Thapelo Matsheka has reported in his budget speech recently that the unemployment rate have escalated. Moreover, it is reported that some companies are forcing employees to go on unpaid leaves due to deteriorating financial status. Even worse, most companies recorded losses while some shut down altogether.
However, the government has decided to hike taxes and levies and introduce some. According to the government this is because the mineral and tourism sectors are not doing good. In that light the following are the changes regarding levies and taxes;
Increment of value added tax (VAT) from twelve percent (12%) to fourteen percent (14%). This has affected the overall prices of products and services. These include food stuffs, liquor, and network services (these include mobile data prices and airtime). The Minister says Botswana has been the lowest in the region in regards to VAT.
Electricity tariffs effect today are being increased by three percent (3%). The tarrif was last increased late last year.
Fuel prices increased by One pula (P1.00). Fuel prices were last increased a month back by another One pula (P1.00). This may lead to increment in transport fares which were last adjusted upwards recently- just before fuel prices got increased.
Plastic levy is also being increased today. The plastic levy was first introduced in 2007 and there has been rumours that it has not been finding its way into the government coffers.
For the first time, sugar levy has been introduced in Botswana. According to the budget speech by Minister Matsheka recently, the government will tax sweetened beverages in relation to their sugar content at a rate of two thebe (P0.02) per gramme (g) of sugar above a content of four gramme (4g) of sugar per hundred milliliters (100 ml). Matsheka says this levy is introduced to reduce the health complications caused by high sugar intake.
Import cars levy has also been introduced. The levy will affect the second hand vehicles usually imported from Asia. The cars have been dominating the roads, and being bought by start-up businesses and Small, Micro and Medium Enterprises (SMMEs) as they could not afford to buy expensive models.
Shareholders withholding tax have been increased by two point five percent (2.5%). Withholding tax effect today is increasing from seven point five percent (7.5) to ten percent (10%).
The State of Public Emergency (SoE) was approved by the Parliament yesterday, which comes along with curfews and ocassional lockdowns. With the increased unemployment rate, reduced salaries, withering livelihoods, and negative economic growth, it is still to be seen how the nation is going to survive with a further load of taxes and levies.