CRS News Flash 16 February 2024 – BOTSWANA – Amendments to certain tax exemptions

Amendments to exemption of certain lump sum payments
The Income Tax (Amendment) Act, 2024, and Commencement Order 2024 were assented to by Parliament on 12 January 2024 and gazetted on 15 January 2024.

The Income Tax (Amendment) Act, 2024 amends the Income Tax Act by increasing the tax-free portion of lump sum pension payouts, severance pay, gratuities and retrenchment packages.

Below is a summary of the amendments:
• The exemption for gratuity or severance pay has been raised from one third to 50% of the amount.
• Under a contract of employment, the exemption from gratuity is raised from one third to 50% of the total amount.
• The exemption for bonuses or gratuities paid to non-residents under a work contract has been raised from one third to 50% of the total amount.
• Retrenchment packages: from one third to 50% of the retrenchment package is now excluded.
• Pension lump sum: from one third to 50% of the pension withdrawal is now exempt.
• The exemption for annual pensions or annuities has been raised from P500 to P20,000.

To view the Gazette, follow the link.