JULY 2026 – BOTSWANA
TAX CHANGES 2026-2027
It is important that employers note the following:
Tax changes published in the Income Tax Act, 2026 and Tax Administration Act, 2026
The Botswana Income Tax Act, 2026 and Tax Administration Act, 2026 were assented to on 29 June 2026 and came into effect on 1 July 2026. The Acts give legislative effect to the key tax measures announced in the 2026 Budget Speech and introduce a modernised income tax framework.
The changes impact PAYE calculations, the taxation of certain employment-related payments, and employer reporting obligations.
Revised PAYE tax tables
The only change to the PAYE tax rates is the introduction of a new top marginal tax rate of 27.5% on annual taxable income exceeding BWP 400,000. The existing tax rates and lower tax brackets remain unchanged for both resident and non-resident employees.
Resident employees:
Non-resident employees:
Employment income
The Act clarifies the definition of employment income for PAYE purposes, confirming the tax treatment of various forms of remuneration, including cash and non-cash benefits. Employers should review their payroll configurations to ensure taxable remuneration is treated in accordance with the new legislation.
Termination payments
New rules apply to certain gratuities, severance payments and retrenchment packages. In qualifying cases, 50% of the payment may be exempt from tax, while the remaining taxable portion may be taxed using a concessionary calculation method prescribed by the legislation.
Employee share schemes
The Act introduces specific taxation rules for employee share scheme benefits. Employers offering share-based remuneration should review the tax treatment of these benefits to ensure compliance with the new requirements.
Retrospective salary adjustments
Where salary adjustments or back-pay relate to previous tax years, the legislation now permits qualifying amounts to be allocated across prior tax years, subject to prescribed conditions and limits.
Revised PAYE return submission deadlines
The submission deadlines for PAYE returns have been shortened:
- Monthly PAYE withholding tax remittance return: Within 14 days after the end of the month (previously 15 days).
- Annual withholding tax return: Within 28 consecutive days after the end of the tax year (previously 31 days).
Employers should ensure that payroll systems, tax tables and payroll processes are reviewed and updated to comply with the new legislative requirements effective from 1 July 2026.
CRS Technologies is reviewing the legislative changes and implementing the necessary payroll updates to support compliance with the Botswana Income Tax Act, 2026.
To download and view the tax laws, follow the link.
