19.     Tax payable for tax period

            (1) The tax payable by a registered person for a tax period is the total amount of output tax payable by the person in respect of taxable supplies made by the person during the period less-

     (a)     subject to this section and section 20, the total amount of input tax-

           (i)       payable in respect of taxable supplies made to the person during the tax period;

          (ii)       paid in respect of any import of goods by the person during the tax period in the course of furtherance of a taxable activity carried on by the person; and

          (iii)       allowed under section 21 for the tax period, and

     (b)     input tax to which subsection (3) applies for the tax period;

     (c)     an amount equal to the tax fraction of any amount paid during the tax period by the registered person as a prize or winnings to the recipient of services under section 4(10);

     (d)     an amount equal to the tax fraction of any amount paid during the tax period by the registered person to indemnify another person under a short term insurance contract provided-

           (i)       the supply of the short term insurance contract is a taxable supply;

          (ii)       the payment is not in respect of the supply of goods or services to the registered person or the importation of goods or services by the registered person;

          (iii)       the supply of the short term insurance contract is not a supply charged with tax at a rate of zero percent under section 10 and, at the time the amount was paid, the other person was not a resident person and not a registered person; and

         (iv)       the payment does not result from a supply of goods or services to that other person where those goods are situated outside Botswana or those services are physically performed elsewhere than in Botswana at the time of the supply;

     (e)     an amount equal to the tax fraction of any amount paid during the tax period by the registered person to a supplier in respect of the redemption of a token, voucher, or stamp referred to in section 9(11) by the supplier; and

     (f)      subject to paragraphs (g), (h), and (i), an amount equal to the tax fraction of the lesser of

           (i)       the amount paid for, or

          (ii)       the fair market value, including tax, of second-hand goods acquired in Botswana during the tax period by a registered person from a person (registered or not registered) in a transaction not subject to tax if the goods are taxable at a positive rate under this Act and are acquired for the purpose of making taxable supplies, or

          (iii)       shall not exceed the amount of transfer duty which was or would have been payable in terms of this paragraph for second hand goods contemplated in paragraph (c) of the definition of input tax in section 2;

     (g)    an amount equal to the tax fraction of the lesser of-

           (i)       the amount paid, or

          (ii)       the fair market value, including tax,

of second-hand goods acquired in Botswana during the tax period by a registered person from a related person, registered or not registered, in a transaction not subject to tax if the goods are taxable at a positive rate under this Act and are acquired for the purpose of making taxable supplies, but not more than the tax imposed on the supply of the goods to the related person;

     (h)    an amount equal to the tax fraction of the value of second-hand goods that are repossessed in Botswana during the tax period by a creditor who is a registered person, from a defaulting debtor, whether registered or not, in a transaction not subject to tax if the goods are taxable at a positive rate under this Act and are acquired for the purpose of making taxable supplies, but not more than the tax imposed on the supply of the goods to the defaulting debtor;

     (i)     an amount equal to the tax fraction of the value of second-hand goods that are acquired in Botswana during the tax period by an insurer who is a registered person, from an insured person in a transaction not subject to tax if the goods-

           (i)       are acquired in settlement of an insurance claim,

          (ii)       are taxable at a positive rate under this Act, and

          (iii)       are acquired for re-supply in a taxable transaction, but not more than the tax imposed on the supply of the goods to the insured person; and

            (1A.) Notwithstanding the provisions of paragraph (a) of subsection (1), a claim for input tax credit can be filed-

     (a)     for a person whose tax period under section 25 or under the regulations issued under that section is a period of one month, up to the next three tax periods;

     (b)     for a person whose tax period under section 25 or under the regulations issued under that section is a period of two months, during the next tax period, and

     (c)     for a person who has paid tax in respect of any imports of goods, in the next tax period.

            (2) Notwithstanding any other provision of this Act, no deduction of input tax shall be made in respect of a supply or import unless-

     (a)     a tax invoice, or debit or tax credit note, in relation to the supply, has been provided in accordance with section 23 or 24 and is held by the registered person taking the deduction at the time any return in respect of the supply is furnished, other than when a tax invoice is not required to be provided;

     (b)     a bill of entry or validating bill of entry as prescribed under section 39 of the Customs and Excise Duty Act, or a document issued by the Department of Customs and Excise or the Commissioner General evidencing payment of tax in relation to an import that has been delivered in accordance with the Customs and Excise Duty Act or this Act and is held by the registered person taking the deduction at the time any return in respect of the import is furnished; and

     (c)    for purposes of subsection 1(f) - (i), with respect to the acquisition, the registered person is in possession of documents required by the Commissioner General.

            (3) Subject to subsection (4), a deduction is allowed to a registered person in the first tax period in which the person is registered for input tax paid or payable by the person in respect of-

     (a)     taxable supplies of goods, other than capital goods, made to the person; and

     (b)     any imports of goods, other than capital goods, made by the person, prior to becoming registered to the extent that the goods are for use or resupply in a taxable activity carried on by the person after registration.

            (4) Subsection (3) applies where-

     (a)     the supply or import occurred not more than four months prior to the date of registration; and

     (b)     the goods are on hand at the date of registration.

            (5) Where the total amount deductible to a registered person for a tax period under subsection (1) exceeds the total amount of output tax payable by the person for that period, the amount of the excess is dealt with in accordance with section 42.

20.     Input tax

            (1) In this section-

            "entertainment" means the provision of food, beverages, tobacco, accommodation, amusement, recreation, or hospitality of any kind by a registered person whether directly or indirectly to any person in connection with a taxable activity carried on by the registered person;

             "passenger vehicle" means a vehicle designed or adapted for the transport of nine or fewer seated persons, including a double cab vehicle but does not include a safari vehicle; and

            "safari vehicle" means a vehicle designed or adapted for use and used to transport tourists in a game reserve, national park, sanctuary, or safari area, by a holder of a valid licence to operate a tourist enterprise, but does not include a saloon car, a station wagon or similar passenger vehicle.

            (2) No amount may be deducted under section 19(1) by a registered person for input tax paid in respect of-

     (a)     a taxable supply to, or import by, the person of a passenger vehicle, unless the person is in the business of dealing in, or hiring of, such vehicles, and the vehicle was acquired for the purposes of such business;

     (b)     a taxable supply to, or import by, the person of goods or services acquired for the purposes of entertainment or providing entertainment, unless-

           (i)       the person is in the business of providing entertainment and the taxable supply or import relates to the provision of taxable supplies of entertainment in the ordinary course of that business; or

          (ii)       the person is in the business of providing taxable supplies of transportation services and the entertainment is provided to passengers as part of the transportation service; or

     (c)     fees or subscriptions paid by the person in respect of membership of any person in a club, association, or society of a sporting, social, or recreational nature.

            (3) Subject to subsection (4), where only a part of the supplies made by a registered person during a tax period are taxable supplies, the amount of the input tax allowed as a deduction under section 19(1)(a)(i) and (ii) for that period is determined as follows-

     (a)     in respect of a supply or import received which is directly allocable to the making of taxable supplies, the full amount of input tax payable in respect of the supply or import shall be allowed as a deduction;

     (b)     in respect of a supply or import received which is directly allocable to the making of exempt supplies, no amount of input tax payable in respect of the supply or import shall be allowed as a deduction; or

     (c)     in respect of a supply or import received which is used both for the making of taxable and exempt supplies, the amount calculated according to the following formula-

AxB/C

              where-

                      A is the total amount of input tax payable in respect of supplies and imports received during the period for which a deduction is allowed under section 19(1), less the input tax accounted for under (a) and (b);

                      B is the total amount of taxable supplies made by the registered person during the period; and

                      C is the total amount of all supplies made by the registered person during the period other than a supply described in paragraph (2)(p) of the First Schedule.

            (4) Where the fraction B/C in paragraph (3)(c) is more than 0.90, the registered person may deduct the total amount of input tax on supplies and imports described in that paragraph.

            (5) Notwithstanding subsection (3), the Commissioner General may determine the amount of input tax allowed for a tax period where a registered person makes both taxable and exempt supplies during the period on such other basis as the Commissioner General considers reasonable.

            (6) A registered person dissatisfied with a decision of the Director under subsection (5) may appeal against the decision only in accordance with the provisions of Part VIII.

21.     Post-sale adjustments

            (1) Subsections (2) to (8) of this section apply where, in relation to a supply by a registered person-

     (a)     the supply is cancelled;

     (b)     the taxation of the supply changes because the nature of the supply is fundamentally varied or altered;

     (c)     the previously agreed consideration for the supply is altered, whether due to an offer of a discount or for any other reason; or

     (d)     the goods or services or part thereof are returned to the supplier.

            (2) Subsection (1) applies only where the registered person making the supply has-

     (a)     provided a tax invoice in relation to the supply and the amount shown therein as the tax charged on the supply is incorrect as a result of the occurrence of one or more of the events described under subsection (1)(a) to (d); or

     (b)     furnished a return for the tax period in which the supply occurred and has accounted for an incorrect amount of output tax on that supply as a result of the occurrence of one or more of the events described under subsection (1)(a) to (d).

            (3) Where subsection (1) applies, the registered person making the supply is required to make an adjustment as specified under subsection (4) or (6).

            (4) Where the output tax properly chargeable in respect of the supply exceeds the output tax actually accounted for by the supplier, the amount of the excess shall be deemed to be the output tax charged by the supplier in relation to a taxable supply made in the tax period in which the event referred to in subsection (1) occurred.

            (5) Where a supplier issues a tax debit note to rectify the output tax charged to the recipient in the circumstances specified under subsection (4), the additional tax specified in the tax debit note shall, for purposes of section 19(1), be deemed to be tax payable by the recipient in the tax period in which the tax debit note is received.

            (6) Subject to subsection (8), where the output tax actually accounted for by the supplier exceeds the output tax properly chargeable in relation to the supply, the supplier shall be allowed an input tax deduction for the amount of the excess in the tax period in which the event referred to in subsection (1) occurred.

            (7) Where a supplier issues a tax credit note to rectify the output tax charged to the recipient in the circumstances specified under subsection (6), the recipient, if a registered person, shall treat the additional tax specified in the tax credit note as output tax payable by the person in respect of a taxable supply made by the person in the tax period in which the tax credit note is received.

            (8) Where the supply has been made to a person who is not a registered person, a deduction under subsection (6) is not allowed, unless the amount of the excess tax has been repaid to the recipient of the supply, whether in cash or as a credit against an amount owing to the registered person by the recipient.

            (9) Subject to subsections (14), (15) and (16), a registered person is allowed an input tax deduction for tax paid in respect of a taxable supply made by the registered person where the whole or part of the consideration for the supply is subsequently treated as a bad debt.

            (10) The amount of the deduction allowed under subsection (9) is the amount of tax paid in respect of the supply which corresponds to the amount of the debt treated as bad.

            (11) The deduction under subsection (9) arises on the later of-

     (a)     the date on which the bad debt was written off in the account of the registered person; or

     (b)     twelve months after the end of the tax period in which the tax was paid in respect of the supply.

            (12) Where an amount in respect of which a deduction has been allowed in accordance with subsection (9) is at any time wholly or partly recovered by the registered person, the registered person is treated as having been charged tax in respect of a taxable supply made during the tax period in which the bad debt is wholly or partly recovered, being an amount of tax calculated according to the following formula-

AxB/C

            where-

          A is the amount allowed as a deduction under subsection (9);

          B is the amount of the bad debt recovered; and

          C is the amount of the bad debt written off.

            (13) The deduction allowed under subsection (9) is treated as input tax under section 19(1) for the purposes of calculating the tax payable by the registered person for the tax period in which the deduction arises and for the purposes of section 42.

            (14) A deduction is allowed under section 9 only if-

     (a)     the taxable supply was made to a person other than a registered person; or

     (b)     the taxable supply was made to a purchaser who is a registered person and the person claiming the deduction under subsection (9) issued a tax credit note to the purchaser listing the amount of the bad debt claimed under the formula under subsection (10).

            (15) Where all or a portion of a bet referred to in section 4(10) is a bad debt under this section, the registered person shall treat the amount written off or unpaid for the period prescribed in subsection (11) as a prize or winnings for purposes of section 19 (1)(c).

            (16) Where an amount treated as a prize or winnings under subsection (15) is recovered in whole or part, the registered person is treated as having made a supply under section 4(10) during the tax period in which the bad debt is wholly or partly recovered.

22.     Interest on unpaid tax

            (1) A person who fails to pay any tax or penalty by the due date for payment under section 33, is liable to pay interest on the unpaid amount at the rate specified in paragraph 2 of the Fifth Schedule, calculated from the date on which the payment was due until the date on which payment was made.

            (2) Interest paid by a person under subsection (1) shall be refunded to the person to the extent that the tax or penalty to which it relates is subsequently determined not to have been due.

            (3) The provisions of this Act relating to the collection and recovery of tax apply to any interest charged under this section as if the interest is tax due under this Act.

23.     Tax invoices

            (1) Subject to subsection (2), a registered person, referred to in this section as the "registered supplier", making a taxable supply to a person, referred to in this section as the "recipient", shall provide the recipient with a tax invoice for the taxable supply containing such particulars as are specified in paragraph 1 of the Fourth Schedule.

            (2) A registered supplier shall not be required to provide a tax invoice if the total consideration for the taxable supply is in cash and does not exceed the amount specified in paragraph 3 of the Fifth Schedule.

            (3) A person shall not provide a tax invoice in circumstances other than those specified under this section.

            (4) Subject to subsection (8), a registered supplier shall issue only one tax invoice for each taxable supply.

            (5) A registered recipient who has not received a tax invoice as required by subsection (1) may request, in writing, the registered supplier to provide a tax invoice in respect of the taxable supply.

            (6) A request for a tax invoice under subsection (5) shall be made within 60 days after the date of the supply.

            (7) A registered supplier who receives a request under subsection (5) shall comply with the request within 14 days after receiving that request.

            (8) Where a registered recipient claims to have lost the original tax invoice for a taxable supply, the registered supplier may provide a copy clearly marked "copy".

            (9) A recipient who is a registered person, may create a document containing such particulars as are specified in paragraph 1 of the Fourth Schedule that shall be treated, for purposes of the Act, as a tax invoice issued by the registered supplier to the recipient if-

     (a)     the Commissioner General has granted the recipient or class of recipients written approval to issue such documents with respect to specified taxable supplies;

     (b)     the supplier and the recipient agree that the supplier shall not issue a tax invoice with respect to such taxable supplies;

     (c)     the document is provided to the supplier and a copy is retained by the recipient;

     (d)     the words "recipient-created tax invoice" are displayed prominently on the document; and

     (e)     the recipient complies with any other conditions that may be imposed by the Commissioner General.

            (10) A registered person who fails to provide a tax invoice as required by this section commits an offence and is liable on conviction to a fine not exceeding P10,000 or to imprisonment for a term not exceeding two years, or to both.

            (11) A person who provides a tax invoice otherwise than as provided for in this section commits an offence and is liable on conviction-

     (a)     where the failure was made knowingly or recklessly, to a fine not exceeding P10,000 or to imprisonment for a term not exceeding two years, or to both; or

     (b)     in any other case, to a fine not exceeding P5,000 or to imprisonment for a term not exceeding one year, or to both.

            (12) Where a document referred to in subsection (9) issued by a recipient of a taxable supply is treated as a tax invoice covering the same taxable supply, an invoice issued by the supplier shall not be a tax invoice for purposes of this Act.

24.     Tax credit and debit notes

            (1) Where a tax invoice has been issued in the circumstances specified under section 21(2)(a) and the amount shown as tax charged in that tax invoice exceeds the tax properly chargeable in respect of the supply, the registered person making the supply shall provide the recipient of the supply with a tax credit note containing the particulars specified in paragraph 2 of the Fourth Schedule.

            (2) A person shall not provide a tax credit note in any circumstances other than those specified under subsection (1).

            (3) Where a tax invoice has been issued in the circumstances specified under section 21(2)(a) and the tax properly chargeable in respect of the supply exceeds the amount shown as tax charged in that tax invoice, the registered person making the supply shall provide the recipient of the supply with a tax debit note containing the particulars specified in paragraph 3 of the Fourth Schedule.

            (4) A person shall not provide a tax debit note in any circumstances other than those specified under subsection (3).

            (5) A registered person shall only issue one tax credit note or tax debit note for the amount of the excess stated in subsection (1) or (3) respectively.

            (6) Notwithstanding the provisions of this section, where a registered person claims to have lost the original tax credit note or tax debit note, the registered person who made the supply may provide a copy clearly marked "copy".

            (7) A registered person who fails to provide a tax credit note or tax debit note as required by this section, commits an offence and is liable on conviction, to a fine not exceeding P10,000 or to imprisonment for a term not exceeding two years, or to both.

            (8) A person who provides a tax credit note or tax debit note otherwise than as provided for in this section commits an offence and is liable on conviction-

     (a)     where the failure was made knowingly or recklessly, to a fine not exceeding P10,000 or to imprisonment for a term not exceeding two years, or to both; or

     (b)     in any other case, to a fine not exceeding P5,000 or to imprisonment for a term not exceeding one year, or to both.