68.     Tax-inclusive pricing

            (1) Any price charged by a registered person in respect of a taxable supply shall, for the purposes of this Act, be deemed to include the tax charged on the supply under section 7(1)(a), whether or not the registered person has included tax in such price.

            (2) Subject to subsection (3), where a registered person advertises or quotes a price in respect of a taxable supply, the person shall include tax in the price advertised or quoted.

            (3) A registered person may advertise or quote a price in respect of a taxable supply as exclusive of tax where-

     (a)     the advertisement or quotation also states the amount of tax charged on the supply and the price inclusive of tax; and

     (b)     the price inclusive of tax and the price exclusive of tax shall be advertised or quoted with equal prominence or impact.

            (4) Subject to subsection (5), price tickets on goods supplied by a registered person, need not state that the price includes tax if this is stated by way of a notice prominently displayed at every entrance to the premises on which the registered person carries on a taxable activity and at every point on such premises where payment is effected.

            (5) The Commissioner General may, in the case of a registered person or class of registered persons, approve any other method of displaying prices of goods or services by such persons.

69.     Variation of consideration

            (1) Where-

     (a)     an agreement for a supply of goods or services by a registered person has been entered into; and

     (b)     subsequent to entering into the agreement, tax is imposed on the supply or the rate of tax applicable to the supply is increased,

the supplier may, notwithstanding anything to the contrary in any agreement or law, recover from the recipient, in addition to the amount payable by the recipient, an amount equal to the amount of tax imposed or the amount by which tax was increased, as the case may be.

            (2) Where-

     (a)     an agreement for a supply of goods or services by a registered person has been entered into; and

     (b)     subsequent to entering into the agreement, tax on the supply is withdrawn or the rate of tax applicable to the supply is decreased,

the supplier shall, notwithstanding anything to the contrary in any agreement or law, reduce the amount payable by the recipient by an amount equal to the amount of tax withdrawn or the amount by which tax was decreased, as the case may be.

            (3) Subject to subsections (4) and (5), where subsection (1) or (2) applies in respect of a supply of goods or services subject to a fee, charge, or other amount, whether a fixed, maximum, or minimum fee, charge, or other amount, prescribed by, or determined pursuant to, any Act, regulation, or measure having force of law, that fee, charge, or other amount may be increased or shall be decreased, as the case may be, by the amount of tax or additional tax chargeable, or the amount of tax no longer chargeable.

            (4) Subsection (3) does not apply where the fee, charge, or other amount has been altered in any Act, regulation, or measure having force of law to take account of an imposition, increase, decrease, or withdrawal of tax.

            (5) Nothing in subsection (3) shall be construed so as to permit a further increase or require a further decrease, as the case may be, in a fee, charge, or other amount where the fee, charge, or other amount is calculated as a percentage or fraction of another amount which represents the consideration in money for a taxable supply.

70.     Application of increased or reduced rate

            (1) Where goods, other than immovable property, are provided by a supplier before the date on which a change in the rate of tax levied under section 7(1)(a) becomes effective in respect of the supply of the goods, or the date on which the tax is imposed or withdrawn in respect of the supply, and the supply is treated under section 8 as having been made on or after the said date, then-

     (a)     in the case of a change in rate on the said date, the rate of tax applicable to the supply is the rate applicable immediately before the said date;

     (b)     in the case of the imposition of tax on the said date, the supply is treated as not being subject to tax; or

     (c)     in the case of withdrawal of the tax on the said date, the supply is deemed to be subject to tax as if the tax had not been withdrawn.

            (2) Where-

     (a)     services are performed; or

     (b)     goods, other than immovable property, are provided in respect of a successive supply contemplated in section 8(11) or (12),

during a period beginning and ending before the date on which a change in the rate of tax levied under section 7(1)(a) becomes effective in respect of the supply of the goods, or the date on which the tax is imposed or withdrawn in respect of the supply, and the supply is deemed under section 8 to have been made on or after the said date, then in the case of-

      (i)     a change in rate on the said date, the rate of tax applicable to the supply is the rate applicable immediately before the said date;

      (ii)     the imposition of tax on the said date, the supply is treated as not being subject to tax; or

     (iii)     withdrawal of the tax on the said date, the supply is deemed to be subject to tax as if the tax had not been withdrawn.

            (3) Where-

     (a)     services are performed; or

     (b)     goods, other than immovable property, are provided in respect of a successive supply contemplated in section 8(11) or (12),

during a period beginning before and ending on or after the date on which a change in the rate of tax levied under section 7(1)(a) becomes effective in respect of the supply of the goods, or the date on which the tax is imposed or withdrawn in respect of the supply, and the supply is deemed under section 8 to have been made on or after the said date, the value of the supply shall, on the basis of a fair and reasonable apportionment, be deemed to consist of a part, referred to as the "first part", relating to the performance of services or provision of goods before the said date and a part, referred to as the "second part", relating to the performance of services or provision of goods on or after the said date.

            (4) For purposes of subsection (3), in the case of-

     (a)     a change in the rate on the said date, the tax payable in respect of the first part shall be determined at the rate applicable before the said date and the tax payable in respect of the second part shall be determined at the rate applicable on the said date;

     (b)     the imposition of tax on the said date, the first part shall not be subject to tax; or

     (c)     the withdrawal of the tax, the first part shall be subject to tax as if the tax had not been withdrawn.

            (5) For the purposes of subsections (1), (2), and (3), goods are deemed to be provided by the supplier of the goods when the goods are delivered to the recipient and goods supplied under a rental agreement are deemed to be provided to the recipient when the recipient takes possession or occupation of the goods.

            (6) Subject to section 80, where, before the date on which an increase in the rate of tax becomes effective, a written agreement is concluded for-

     (a)     the sale of immovable property consisting of-

           (i)       a dwelling together with land on which it is erected, or of any real right conferring a right of occupation of a dwelling, or of any unit as defined in section 2 of the Sectional Titles Act, such unit being a dwelling; or

          (ii)       land, or of any real right conferring a right of occupation of land for the sole or principal purpose of the erection by or for the purchaser of a dwelling or dwellings on the land, as confirmed by the purchaser in writing; or

     (b)     the construction of a new dwelling by a registered person carrying on a construction business; and

     (c)     the price of the sale or construction in question was determined and stated in the agreement which was in force before the said date and signed by the parties thereto before that date; and

     (d)     the supply of such immovable property or construction services under the said agreement is deemed under section 8 to have been made on or after the said date,

          the rate of tax levied under section 7 on that supply shall be the rate at which tax would have been levied had the supply taken place on the date on which such agreement was concluded.

71.     Schemes for obtaining tax benefits

            (1) In this section-

            "scheme" includes an agreement, arrangement, promise, or undertaking whether express or implied and whether or not enforceable, or intended to be enforceable, by legal proceedings, and any plan, proposal, course of action, or course of conduct; and

            "tax benefit" includes-

     (a)     a reduction in the liability of any person to pay tax;

     (b)     an increase in the entitlement of a person to an amount deductible under section 19(1) or to a refund of tax; or

     (c)     any other avoidance or postponement of liability for the payment of tax.

            (2) Notwithstanding anything in this Act, if the Commissioner General is satisfied that a scheme has been entered into or carried out where-

     (a)     a person has obtained a tax benefit in connection with the scheme; and

     (b)     having regard to the substance of the scheme, it could be concluded that the person, or one of the persons, who entered into or carried out the scheme did so for the sole or dominant purpose of enabling the person to obtain the tax benefit,

the Commissioner General may determine the liability of the person who has obtained the tax benefit and of any other person related with the scheme as if the scheme had not been entered into or carried out, or in such manner as in the circumstances the Commissioner General considers appropriate for the prevention or reduction of the tax benefit.

72.     Currency conversion

            (1) For the purposes of this Act, all amounts of money are to be expressed in Pula.

            (2) Where an amount is expressed in a currency other than Pula-

     (a)     in the case of imports, the amount shall be converted at the exchange rate as determined in terms of the Customs and Excise Duty Act; or

     (b)     in all other cases, the amount shall be converted at the exchange rate applying between the currency and the Pula at the time the amount is taken into account under this Act.

73.     International agreements

            (1) The Minister may, on behalf of the Government, enter into an agreement with the government of another country or territory, referred to as the "other Contracting State", whereby arrangements are made with that government-

     (a)     for the prevention, mitigation, or discontinuance of the levying, under the laws of Botswana and the other Contracting State, of value added tax or any other similar tax where a supply of goods or services is subject to such tax in both Botswana and the other Contracting State, where such goods or services are imported into Botswana or the other Contracting State, as the case may be;

     (b)     for the refunding of value added tax or any similar tax, or any portion of such tax, levied under the laws of Botswana and the other Contracting State, in respect of the supply of goods or services in Botswana or the other Contracting State, as the case may be, where such goods or services are imported into Botswana or the other Contracting State, as the case may be;

     (c)     for regulating or co-ordinating any matter with regard to the levying and collection under the laws of Botswana or the other Contracting State of value added tax or any similar tax; or

     (d)     the rendering of reciprocal assistance in the administration and collection of value added tax or any similar tax under the laws of Botswana and the other Contracting State, or in respect of the execution of the arrangements provided for in an agreement entered into in terms of this section.

            (2) As soon as may be possible after the conclusion of any such agreement, the agreement shall be laid before the National Assembly, but shall not take effect unless or until it is approved by resolution of the National Assembly, when it shall come into operation or be deemed to have come into operation from the date specified in the agreement.

            (3) The Minister may at any time by Order, which shall be laid before the National Assembly, amend or cancel an agreement entered into under subsection (2), and if the amendment or cancellation is approved by resolution of the National Assembly, shall stand amended or cancelled from the date specified in such Order.

            (4) The cancellation of an agreement under this section shall not affect the validity of anything previously done thereunder.

74.     Registration of certain goods prohibited in certain circumstances

            Where any form of registration is required under any law in respect of goods consisting of an aircraft, boat, fishing vessel, ship, yacht, motor cycle, motor vehicle, tractor, caravan, or trailer, hereinafter referred to as "registrable goods", no registering authority responsible for such registration under such law shall effect such registration upon change of ownership or importation into Botswana of the registrable goods unless the person applying for registration produces to such registering authority-

     (a)     in the case of-

           (i)       registrable goods which form the subject of any supply, or which are imported into Botswana and are not required to be cleared under the Customs and Excise Duty Act, a receipt or certificate issued by the Director of Customs and Excise or the Commissioner General showing that tax which is payable under this Act has been paid in respect of such supply or importation into Botswana or that no tax is payable under the Act in respect of such supply or importation, as the case may be, of the registrable goods in consequence of which the registration is required; or

          (ii)       registrable goods imported into Botswana which are required to be cleared under the Customs and Excise Duty Act, a customs document issued by the Director of Customs and Excise or a document issued by the Commissioner General showing that tax which is payable under this Act has been paid in respect of such importation into Botswana, or a receipt or certificate showing that no tax is payable under this Act in respect of such importation, as the case may be, of the registrable goods in consequence of which the registration is required;

     (b)     a declaration, in such form as the Commissioner General may prescribe, issued by any registered person who, in carrying on a taxable activity in the ordinary course of which registrable goods are dealt in, supplied such goods in consequence of which the registration is required, certifying that the tax payable under this Act has been, or will be, paid by such person; or

     (c)     a certificate issued by the Commissioner General, or other documentation acceptable to the Commissioner General, to the effect that the supply or import of the registrable goods was an exempt supply or exempt import, as the case may be.

75.     VAT manufacturing warehouse certificate

            (1) For purposes of this section, "manufacture" means the application of any operation or process for the conversion by manual or mechanical means of materials by changing the composition, shape, size, nature, or quality of such materials, including the assembly of parts or components, into a new product or article, but does not include the installation of machinery or equipment for the purpose of construction, or the packing, dividing into lots, sorting, grading, or marking of any material, product, or article.

            (2) For purposes of this section, "international financial services centre company" means a company specified in section 138 of the  Income Tax Act, that is operated by a registered person in possession of a certificate issued by the Commissioner General for the rendering of financial services for export from Botswana.

            (3) A value added tax manufacturing warehouse is a facility operated by a registered person in possession of a certificate issued by the Commissioner General for the manufacture of taxable goods for export from Botswana.

            (4) A certificate described in subsection (2) or (3) shall be subject to the terms, conditions, and limitations imposed by the Commissioner General.

            (5) Where the Commissioner General is satisfied that a registered person operating a value added tax manufacturing warehouse or an international financial services centre company under a certificate described in subsection (2) or (3) no longer satisfies the conditions in that certificate, the Commissioner General may cancel the certificate.

            (6) A registered person whose certificate is cancelled under subsection (5) is deemed to have made-

     (a)     a taxable supply of any goods on hand, including capital goods, at the time the certificate is cancelled in respect of which the person has been allowed a deduction for input tax;

     (b)     the taxable supply at the time the certificate was cancelled; and

     (c)     the taxable supply for a value equal to the fair market value of the supply.

            (7) The Minister may make regulations to carry out the purposes of this section, including the information to be included in an application for a certificate, and the standards for the issuance of a certificate.

            (8) A person dissatisfied with a decision of the Commissioner General under this section to issue or cancel a person's certificate may appeal against the decision only in accordance with the provisions of Part VIII.

76.     Auctioneer and agent

            (1) Where a taxable supply has been made in circumstances specified under section 4(26)(a) and the recipient of the supply is a registered person, the agent may issue a tax invoice in accordance with this Act in relation to the supply as if the agent had made the supply; and the principal shall not also issue a tax invoice in relation to the supply.

            (2) Where a taxable supply has been made in the circumstances specified under section 4(26)(b) and the principal is a registered person, at the request of the agent, a tax invoice in relation to the supply may be issued to the agent; and a tax invoice shall not be issued to the principal in relation to the supply.

            (3) Where tax is payable by an auctioneer in respect of the supply of goods specified under section 4(28), the auctioneer shall charge the purchaser the amount of tax payable in respect of the sale by adding the tax to the amount of a successful bid or, in the case of sales out-of-hand, to the purchase price, and shall recover that tax from the purchaser.

77.     Regulations

            (1) The Minister may, after consulting with the Commissioner General, make regulations for any matter which under this Act is to be prescribed or for the better carrying out of the provisions and purposes of this Act, and without prejudice to the generality of the foregoing, such regulations may provide for-

     (a)     the establishment, appointment, and composition of the Board of Adjudicators, its procedures and matters relating to its operations and activities under this Act;

     (b)     the procedure to re-open premises closed under section 63; or

     (c)     prescribing any form, notice, return or other document published by the Minister for the efficient administration of this Act.

            (2) The Minister may amend the Fourth and Fifth Schedules by statutory instrument, but with respect to any interest rate, by no more than two percentage points.

77A.  Agreement varying application of Act

            Where the Commissioner General is satisfied that because of the manner in which any person conducts his business activities, difficulties or anomalies may arise with regard to the application of any of the provisions of this Act, the Commissioner General and that person may agree on the manner in which those provisions shall be applied in order to overcome those difficulties or anomalies:

            Provided that such agreement shall not have the effect of substantially reducing or increasing the ultimate liability for tax levied under this Act.

78.     Variation in rate of tax

            (1) Notwithstanding section 77 and subject to subsection (2), the Minister may, including when Parliament is not in session, by notice in the Gazette, increase or decrease a rate of tax under section 7(1) by not more than two percentage points.

            (2) Where the Minister changes a rate as specified under subsection (1) before Parliament has met for the first time for the dispatch of business in any session during which the Minister introduces the Appropriation Bill, the change in rate shall lapse 6 months after the effective date specified in the notice unless, within that time, the amended rate is confirmed by resolution of Parliament, but the amended rate shall be valid before it so lapses.

            (3) Where the Minister during a session of Parliament, tables a tax proposal to increase or decrease a rate of tax under section 7(1) and publishes a notice of this action in the Gazette, the increased or decreased rate shall apply for the purposes of determining the amount of tax payable under this Act on any date on or after the effective date which the Minister has specified in the said notice of any such increase or decrease in the tax rate, as the case may be, except that the amended rate shall lapse 6 months after the effective date specified in the notice unless, within that time, the amended rate is confirmed by resolution of Parliament.

            (4) Where, in any legal proceedings, the question arises as to whether the Minister has tabled a taxation proposal referred to in subsection (3), or as to the particulars contained in that proposal, a copy of a document purporting to be printed by order of the Speaker of the National Assembly and to contain such proposal, shall be accepted as sufficient evidence that such proposal was tabled and of the particulars contained therein.

79.     Repeal

            (1) The Sales Tax Act is hereby repealed.

            (2) No reference to Sales Tax in any Act, other than this Act, shall be treated as a reference to tax under this Act.

80.     Transitional

            (1) In this section-

            "qualifying goods" means any stock held for sale in the ordinary course of business;

            "qualifying vehicles" means registrable goods as defined in section 74, which are eligible for an input tax deduction in terms of section 19, and on which sales tax was paid when they were imported into or purchased in Botswana.

            "repealed Act" means the Sales Tax Act; and

            "sales tax" means the tax imposed under the  Sales Tax Act.

            (2) The repealed Act, including the rules governing the levy, payment, assessment, reporting, and recovery of those taxes, continue to apply to a supply or import taking place prior to the date on which this Act comes into operation.

            (3) Every appointment made under the repealed Act and subsisting at the date of commencement of this Act shall be deemed to be an appointment made under this Act; and an oath of secrecy taken under the repealed Act is treated as having been taken under this Act.

            (4) Every form or document used in relation to the repealed Act may continue to be used under this Act, and any reference in such form or document to provisions of and expressions appropriate to the repealed Act, is taken to refer to the corresponding provisions and expressions of this Act.

            (5) Notwithstanding section 19(3), in calculating the amount of tax payable by a registered person after the tax becomes effective, the registered person may claim as an amount deductible under section 19, an amount equal to the sales tax deduction calculated in accordance with subsection (6) and deductible as provided under subsection (7).

            (6) For the purposes of subsection (5), where a registered person-

     (a)     held, at the end of the last business day prior to the beginning of the first tax period after the tax becomes effective-

         (A)       qualifying goods acquired not more than 4 months before the tax becomes effective; and

         (B)       qualifying vehicles acquired not more than 12 months before the tax becomes effective; and

     (b)     the Commissioner General is satisfied that sales tax has been paid on the acquisition or import of those goods,

the amount of the sales tax deduction shall be the amount of such taxes paid on such goods, but with respect to each item qualifying for the deduction, the sales tax shall not exceed the fair market value multiplied by the tax fraction.

            (7) If, in any tax period, a registered person has sales tax deductible under subsection (5), the amount deductible is deemed to be input tax deductible under section 19.

            (8) No deduction shall be allowed under subsection (5) for any sales tax paid in respect of the acquisition of any goods if the VAT imposed on a supply in acquisition of those goods after the effective date of this Act would not qualify for the section 19 deduction.

            (9) A person wishing to claim a deduction under subsection (5) for sales tax paid on qualifying goods on hand on the date on which this Act comes into force, shall register on such date.

            (10) A person claiming a deduction under subsection (5) shall submit with the return an inventory of all qualifying goods on hand at the beginning of the first day on which this Act comes into force, supported by documentary evidence of the payment of sales tax.

            (11) A disallowance of a deduction for sales tax imposed before the date on which this Act comes into force, shall not be treated as a disallowance for purposes of section 4(19).

            (12) Where a contract is concluded between two or more parties before this Act comes into force, and no provision relating to tax is made in the contract, the supplier shall recover from the recipient, tax due on any taxable supply made under the contract and made after the date on which this Act comes into operation.

            (13) Where a contract concluded after the date on which this Act comes into operation, does not include a provision relating to tax, the contract price shall be deemed to include tax and the supplier under the contract shall account for the tax due.

            (14) Subject to subsection (16) if, in connection with a supply of goods or services-

     (a)     title to goods passes, delivery of goods is made or services are rendered after the date on which this Act comes into operation; and

     (b)     payment is received or an invoice issued within nine months before that date,

for the purposes of determining the tax period in which the supply occurs or an input tax deduction is allowable, the payment is treated as having been made or the invoice is treated as having been issued on the date on which this Act came into force.

            (15) If services subject to sales tax were rendered before the date on which this Act came into force and payment is made within four months after the Act came into force, VAT is not imposed on the supply of the services.

            (16) If-

     (a)     successive supplies described in section 8(11) or (12) were provided; or

     (b)     services subject to sales tax were rendered,

during a period that began before and ended after this Act came into force, VAT is imposed on the consideration for the services rendered after this Act came into effect, except that to the extent the consideration for the services rendered before this Act came into effect is paid more than four months after the Act came into effect, the consideration shall be treated as consideration for the supply of services rendered on the day after the end of that four month period.

            (17) Notwithstanding subsection (16), if construction, manufacture or extension of building or civil engineering work is performed under a written agreement executed before this Act came into effect and the property is made available to the recipient after that date, VAT is imposed only on the value of work performed after that date if the value of the work on the day before this Act came into force is determined in a manner approved by the Commissioner General and is submitted to the Commissioner General by the end of the supplier's first VAT period after VAT becomes effective.

            (18) If real property is provided under a rental agreement, for a period that commences before and ends after the date this Act comes into force, the consideration for the rental shall not include the amount attributable to the period that ends before the effective date of the Act.

            (19) For the purposes of sections 4(9) and 19(1)(d), a claim does not include a claim related to an event that occurred before this Act came into force.

            (20) For purposes of section 19(1)(c), an amount paid as a prize or winnings does not include an amount attributable to obligations or contingent obligations that exist immediately before this Act comes into force.

            (21) The Minister may make regulations for other transitional measures relating to the end of sales tax, the start of value added tax, or the transition from sales tax to value added tax.

FIRST SCHEDULE
ZERO-RATED SUPPLIES

(section 10)

     1. In this Schedule-

     "ancillary transport services" means stevedoring services, lashing and securing services, cargo inspection services, preparation of customs documentation, container handling services, and storage of transported goods or goods to be transported;

     "export country" means any country other than Botswana and includes any place which is not situated in Botswana, but does not include any specific country or territory that the President by proclamation in the Gazette designates as one that is not an export country;

     "exported from Botswana", in relation to any movable goods supplied by any registered person under a sale or a credit agreement, means-

     (a)      consigned or delivered by the registered person to the recipient at an address in an export country as evidenced by documentary proof acceptable to the Commissioner General; or

     (b)      delivered by the registered person to the owner or charterer of any foreign-going aircraft when such aircraft is going to a destination in an export country and such goods are for use or consumption in such aircraft, as the case may be;

     "foreign-going aircraft" means any aircraft engaged in the transportation for reward of passengers or goods wholly or mainly on flights between airports in Botswana and airports in export countries or between airports in export countries;

     "intellectual property rights" means any patent, design, trade mark, copyright, know-how, confidential information, trade secret, or similar rights;

     "international transport services" means-

     (a)      the services, other than ancillary transport services, of transporting passengers or goods by road, rail, water, or air-

            (i)       from a place outside Botswana to another place outside Botswana where the transport or part of the transport is across the territory of Botswana;

           (ii)       from a place outside Botswana to a place in Botswana; or

          (iii)       from a place in Botswana to a place outside Botswana;

     (b)      the services of transporting passengers from a place in Botswana to another place in Botswana to the extent that transport is by aircraft and constitutes "international carriage" as defined in Article 3 of the Convention on International Civil Aviation;

     (c)      the services, including any ancillary transport services, of transporting goods from a place in Botswana to another place in Botswana to the extent that those services are supplied by the same supplier as part of the supply of services to which paragraph (a) applies; or

     (d)      the services of insuring or the arranging of the insurance or the arranging of the transport of passengers or goods to which paragraphs (a) to (c) applies;

     "maize meal for human consumption" means-

     (a)      maize meal graded as super maize meal, special maize meal, sifted maize meal, unsifted maize meal, samp, or mealie rice, but only when they are provided for human consumption; or

     (b)      maize intended to be used for the production of maize meal contemplated in subparagraph (a); and

     "sorghum" means sorghum or sorghum meal, but only if provided for human consumption.

     2. Subject to paragraph 3, the following supplies are specified for the purposes of section 10-

     (a)      a supply of goods where the supplier has entered the goods for export, pursuant to the Cap. 50:01 Customs and Excise Duty Act, and the goods have been exported from Botswana by the supplier;

     (b)      a supply of goods where the Commissioner General is satisfied that the goods have been exported from Botswana by the supplier;

     (c)      a supply of goods where the goods are not situated in Botswana at the time of supply and are not to be entered into Botswana for home consumption pursuant to the Customs and Excise Duty Act by the supplier of the goods;

     (d)      a supply of the goods under a rental agreement, charter party, or agreement for chartering, where the goods are used exclusively in an export country;

     (e)      a supply of goods in the course of repairing, renovating, modifying, or treating any goods to which subparagraph (i)(ii) or (iv) applies and the goods supplied-

            (i)       are wrought into, affixed to, attached to, or otherwise form part of those other goods; or

           (ii)       being consumable goods, become unusable or worthless as a direct result of being used in that repair, renovation, modification, or treatment process;

     (f)       a supply of goods or services referred to in section 4(11) by a registered person where the branch or main business is situated in an export country;

     (g)      a supply of international transport services;

     (h)      a supply of services directly in connection with land, or any improvement thereto, situated outside Botswana;

     (i)       a supply of services directly in respect of-

            (i)       movable property situated outside Botswana at the time the services are rendered;

           (ii)       goods temporarily imported into Botswana under items 470.01, 470.02, 470.03, or 480.0 of Part 3 of the Fourth Schedule to the Customs and Excise Duty Act;

          (iii)       a supply of goods referred to in paragraphs (a) or (b) of the definition of "exported from Botswana"; or

          (iv)       the repair, maintenance, cleaning, or reconditioning of a foreign-going aircraft;

     (j)       a supply of services directly to a non-resident person not being a registered person, otherwise than through an agent or other person-

            (i)       comprising the handling, pilotage, salvage, or towage of any foreign-going aircraft while situated in Botswana;

           (ii)       provided in connection with the operation or management of any foreign-going aircraft; or

          (iii)       comprising the storage, repair, maintenance, cleaning, management, or arranging the provision of a container temporarily imported in terms of item 2(d)(ii)(A) of the Third Schedule, or the arranging of such services; or

     (k)      a supply of services to a non-resident person who is not a registered person comprising the arranging for the person of-

            (i)       a supply of goods referred to in paragraphs (a) and (b) of the definition of "exported from Botswana;

           (ii)       a supply of services to which subparagraph (i)(iv) or (j) applies; or

          (iii)       the transport of goods, including ancillary transport services, within Botswana;

     (l)       a supply of services comprising the repair, maintenance, cleaning, or reconditioning of a railway train operated by a non-resident person who is not a registered person;

     (m)     a supply of services physically rendered elsewhere than in Botswana;

     (n)      a supply of services to a non-resident person who is outside Botswana at the time the services are supplied, other than a supply of services-

            (i)       directly in connection with immovable property situated in Botswana;

           (ii)       directly in connection with movable property situated in Botswana at the time the services are supplied unless the movable property is exported from Botswana subsequent to the supply of services;

          (iii)       comprising the refraining from undertaking any taxable activity in Botswana; or

          (iv)       comprising the tolerating of another person undertaking any taxable activity in Botswana;

     (o)      a supply of services comprising-

            (i)       the filing, prosecution, granting, maintenance, transfer, assignment, licensing, or enforcement of intellectual property rights for use outside Botswana;

           (ii)       incidental services necessary for the supply of services referred to in subparagraph (i); or

          (iii)       the acceptance by any person of an obligation to refrain from pursuing or exercising in whole or part, intellectual property rights for use outside Botswana;

     (p)      a supply by a registered person to another registered person of a taxable activity, or part of a taxable activity, as a going concern, provided a notice in writing signed by the transferor and transferee is furnished to the Commissioner General within 21 days after the supply takes place and such notice includes the details of the supply;

     (q)      a supply of sorghum or maize meal for human consumption, but does not include maize meal for human consumption when it is furnished or served as a meal, or as cooked or prepared food; or

     (r)       a supply of goods or services for the personal or official use of the President or any dependent member of the President's family.

     (s)      a supply of-

              leaded petrol, unleaded petrol, diesel oil and illuminating paraffin, which consist of fuel levy goods as defined in section 2 of the Customs and Excise Duty Act.

     (t)       a supply of-

            (i)       millet grain,

           (ii)       millet meal,

          (iii)       wheat grain,

          (iv)       maize cobs,

           (v)       flour,

          (vi)       sugar, and

         (vii)       setswana beans

              in their natural state and not mixed with other products, to the extent provided in the regulations;

     (u)      a supply of pesticides specified under Customs Tariff Heading 38.08;

     (v)      a supply of fertilizers specified under Customs Tariff Headings 31.01 - 31.05;

     (w)     a supply of tractors specified under Customs Tariff Heading 8701.90 when acquired for farming by a person operating a farming business, to the extent provided in the regulations.

     3. Paragraph 2 shall not apply in respect of any supply of goods which have been or will be re-imported to Botswana by the supplier.

     4. For purposes of paragraph 2, the export by a registered person to a non-resident supplier of goods previously imported and subject to tax is a supply of the goods and the exporter is the supplier if, at the port of exit, the exporter identifies the goods and presents the documentary proof required by the Commissioner General.

SECOND SCHEDULE
EXEMPT SUPPLIES

(section 11)

     1. In this Schedule-

     "commercial rental establishment" means-

     (a)      accommodation in any hotel, motel, inn, boarding house, hostel, or similar establishment in which lodging is regularly or normally provided to five or more persons at a daily, weekly, monthly, or other periodic charge;

     (b)      accommodation in any house, flat, apartment, or room, other than accommodation in respect of which the provisions of paragraph (a) or (c) apply, which is regularly or systematically leased or held for lease as residential accommodation for continuous periods not exceeding 45 days in the case of each occupant of such house, flat, apartment, or room, if the total annual receipts and accruals from the lease thereof exceeded the amount specified in paragraph 7 of the Fifth Schedule or there are reasonable grounds for believing that such total annual receipts and accruals will exceed that amount;

     (c)      accommodation in any house, flat, apartment, room, caravan, houseboat, tent, or caravan or camping site which constitutes an asset, including a leased asset, of a business undertaking or a separately identifiable part of a business undertaking carried on by any person who-

            (i)       leases or holds for leasing as residential accommodation five or more houses, flats, apartments, rooms, caravans, houseboats, or caravan or camping sites in the course of such business undertaking;

           (ii)       derives total annual receipts and accruals from the leasing of all such houses, flats, apartments, rooms, caravans, houseboats, and caravan and camping sites which exceed the amount specified in paragraph 7 of the Fifth Schedule or there are reasonable grounds for believing that such total annual receipts and accruals will exceed that amount; and

          (iii)       regularly or normally leases or holds for lease as residential accommodation such houses, flats, apartments, rooms, caravans, houseboats, or caravan or camping sites for continuous periods not exceeding 45 days in the case of each occupant; or

     (d)      any other accommodation designated by the Minister by regulation to be a commercial rental establishment but does not include, unless within paragraph (d)-

     (e)      accommodation in a boarding establishment or hostel operated by an employer solely or mainly for the benefit of the employees of such employer or of a related person of such employer or their dependants, provided such establishment or hostel is not operated for the purpose of making profits from such establishment or hostel for the employer or such related person;

     (f)       accommodation in any boarding establishment or hostel operated by any local authority otherwise than for the purpose of making profits from such establishment or hostel; or

     (g)      accommodation in any registered hospital, maternity home, nursing home, convalescent home, hospice, or clinic;

     "dwelling" means any building, premises, structure, or any other place, or any part thereof, used predominantly as a place of residence or abode of any natural person or which is intended for use as a place of residence or abode of any natural person, together with any appurtenances belonging thereto and enjoyed therewith, but does not include a commercial rental establishment;

     "education services" means education and hostel facilities for students and scholars provided by-

     (a)      a pre-primary, primary, or secondary school;

     (b)      a technical college or university; or

     (c)      an institution established for the promotion of adult education, vocational training, technical education, or the education or training of physically or mentally handicapped persons;

     "public medical facility" means a Government operated medical facility or Government aided medical facility;

     2. The following supplies are specified as exempt supplies for the purposes of section 11-

     (a)      a supply of financial services to the extent specified in the regulations;

     (b)      a supply of prescription drugs specified under Schedules 1, 2, and 3 of the Drugs and Related Substances Act, and a supply of services specified in the regulations by a person in the ordinary course of operating a public medical facility, including a hospital, maternity home, nursing home, convalescent home, hospice, or clinic;

     (c)      a supply of education services to the extent provided in the regulations;

     (d)      a supply of-

            (i)       accommodation in a dwelling-

                      (A)     under a lease or rental of the accommodation; or

                      (B)     where the supplier is the employer of the recipient, the recipient is entitled to occupy the accommodation as a benefit of his office or employment and his right thereto is limited to the period of his employment or the term of his or her office or a period agreed upon by the supplier and the recipient; or

           (ii)       leasehold land by way of lease (not being a grant or sale of the lease of that land) to the extent that the subject land is used or is to be used for the principal purpose of accommodation in a dwelling erected or to be erected on that land;

     (e)      a supply of any services to any of its members in the course of the management of an association as defined in section 2 of the Sectional Titles Act, where the cost of supplying such services is met out of contributions levied by such association; or

     (f)       a supply of any goods or services by the State, a local authority, or an association not for gain where the consideration for the goods or services is nominal in amount or not intended to recover the cost of such goods or services.

     (g)      a supply of domestic passenger transportation by road or rail, other than the transportation of tourists, to the extent provided in the regulations;

     (h)      cash grants made by or received from the State, to the extent provided in the regulations;

     (i)       a supply of condoms; and

     (j)       donations.

     3. Nothing in paragraph 2(a) shall be interpreted to exempt goods or services that are rendered for stated consideration in the form of any fee, commission, or charge, other than discounting cost, and are listed in the regulations.

THIRD SCHEDULE
EXEMPT IMPORTS

(section 14)

     1. In this Schedule-

     "specified country" means Namibia, Lesotho, South Africa, and Swaziland.

     2. The following imports are specified as exempt imports for the purposes of section 14-

     (a)      an import of goods for the personal or official use of the President or any dependent member of the President's family;

     (b)      an import of goods by a registered person operating a value added tax manufacturing warehouse or an international financial services centre company under a certificate described in section 75 for use in connection with the operations covered by that certificate;

     (c)      an import of services where the recipient of the services received the services in respect of a technical assistance agreement referred to in section 43(1)(c); or

     (d)      an import of goods which are entered or are required to be entered in terms of the Customs and Excise Duty Act, where-

            (i)       the goods fall under any heading and description mentioned below, to the extent indicated and subject to the Notes set out in Schedule No. 4 to the Customs and Excise Duty Act, and in respect of which either no customs duty is payable or a rebate of customs duty is granted in terms of the said Act:

Item No.

Heading and Description

405.04

Goods for welfare or charitable purposes.

406.00

Goods for Heads of State, Diplomatic and other Foreign Representatives.

407.01

Personal effects and sporting and recreational equipment, new or used:

00.00/01.01

Imported either as accompanied or unaccompanied passengers' baggage by non-residents of Botswana for their own use during their stay in Botswana;

00.00/01.02

Exported by residents of Botswana for their own use while abroad and subsequently re-imported either as accompanied or unaccompanied passengers' baggage by such residents.

407.02

Goods imported as accompanied passengers' baggage either by non-residents or residents of Botswana and cleared at the place where such persons disembark or enter Botswana:

Per person, any of the following consumable products:

22.00/01.00

Wine, not exceeding 2 litres;

22.00/02.00

Spirituous and other alcoholic beverages, a total quantity not exceeding 1 litre;

24.02/01.00 and 24.03/01.00

Manufactured tobacco, not exceeding 400 cigarettes and 50 cigars and 250 g of cigarette or pipe tobacco;

33.03/01.00

Perfumery not exceeding 50 ml and toilet water not exceeding 250 ml;

00.00/01.00

Other new or used goods of a total value not exceeding the amount specified in paragraph 8 of the Fifth Schedule.

407.04

Motor vehicles imported by natural persons on change of permanent residence.

407.06

Household furniture, other household effects and other removable articles, including equipment necessary for the exercise of the calling, trade or profession of the person, other than industrial, commercial or agricultural plant and excluding motor vehicles, alcoholic beverages and tobacco goods, the bona fide property of a natural person (including a returning resident of Botswana after an absence of 6 months or more) and members of her family, imported for own use on change of her residence to Botswana:

     Provided these goods are not disposed of within a period of 6 months from the date of entry.

408.01

Cups, medals and other trophies awarded abroad to any person, and imported by him or on his behalf, and such articles imported for presentation:

(i)  as prizes at public exhibitions or shows, at public examinations or examinations in any educational institution, or for skill or sport in public competition or competition in any educational institution;

(ii) as prizes for target shooting by air, military, naval or police forces; or

(iii) for bravery, good conduct, humanity, for excellence in art, industry, invention, manufactures, learning, science, or for honourable or meritorious public services.

409.01

Imported goods (including packing containers) re-exported, thereafter returned to or brought back by the exporter or any other party, without having been subjected to any process of manufacture or manipulation and without a permanent change of ownership:

     Provided that the exemption shall not apply if at the time of export of such goods-

(1) the supply of the goods was charged with tax at the rate of zero percent under section 10; or

(2) the supply of those goods was made before the commencement date and that supply would have been charged with tax at the rate of zero percent under section 10, if the supply had taken place on or after the commencement date.

409.02

Goods (including packing containers) produced or manufactured in Botswana, exported therefrom and thereafter returned to or brought back by the exporter or any other party, without having been subjected to any process of manufacture or manipulation (excluding excisable goods exported ex a customs and excise warehouse):

     Provided that the exemption shall not apply if at the time of export of such goods-

(1) the supply of the goods was charged with tax at the rate of zero percent under section 10; or

(2) the supply of those goods was made before the commencement date and that supply would have been charged with tax at the rate of zero percent under section 10, if the supply had taken place on or after the commencement date.

409.04

Imported or locally manufactured articles sent abroad for processing or repair, provided they are exported under customs and excise supervision, retain their essential character, are returned to the exporter, no change of ownership having taken place, and can be identified on re-importation:

     Provided that the exemption shall apply only to the extent of the value of the goods sent from Botswana on the day the goods left Botswana.

409.06

Excisable goods exported ex a customs and excise warehouse and thereafter returned or brought back by the exporter, without having been subjected to any process of manufacture or manipulation and without a permanent change in ownership having taken place:

     Provided that the exemption shall not apply if at the time of export of such goods-

(1) the supply of the goods was charged with tax at the rate of zero percent under section 10; or

(2) the supply of those goods was made before the commencement date and that supply would have been charged with tax at the rate of zero percent under section 10, if the supply had taken place on or after the commencement date.

409.07

Compensating products obtained abroad from goods temporarily exported for outward processing, in terms of a specific permit issued by the Permanent Secretary, Ministry of Commerce and Industry:

     Provided that-

(1) the specific permit is obtained before the temporary exportation of the goods;

(2) any additional conditions which may be stipulated in the said permit are complied with; and

(3) the exemption shall apply only to the extent of the value of the goods sent from Botswana on the day the goods left Botswana.

412.03

Used personal or household effects (excluding motor vehicles) bequeathed to persons residing in Botswana.

412.04

Used property of a person normally resident in Botswana who dies while temporarily outside Botswana.

412.10

Bona fide unsolicited gifts of not more than two parcels per person per calendar year and of which the value per parcel does not exceed UA 400, excluding goods contained in passengers' baggage, wine, spirits and manufactured tobacco (including cigarettes and cigars) consigned by natural persons abroad to natural persons in Botswana.

412.11

Goods imported-

(1) for the relief of distress of persons in cases of famine or other national disaster;

(2) under any technical assistance agreement; or

(3) in terms of an obligation under any multilateral international agreement to which Botswana is a party.

412.12

Goods imported for any purpose agreed upon between the Governments of Botswana, Lesotho, South Africa, Swaziland, and Namibia.

470.01

Goods temporarily admitted for processing:

     Provided that such goods do not become the property of the importer.

470.02

Goods (including parts thereof) temporarily admitted for repair, cleaning or reconditioning.

470.03

Goods cleared in terms of a permit issued by the Permanent Secretary, Ministry of Commerce and Industry for use in the manufacture, processing, finishing, equipping or packing of goods exclusively for export.

480.00

Goods temporarily admitted for specific purposes.

490.00

Goods temporarily admitted subject to exportation in the same state;

(ii) the goods are any of the following in respect of which the Director of Customs and Excise has in terms of section 39(2) of the Customs and Excise Act granted permission that entry need not be made:

     (A) containers temporarily imported;

     (B) human remains;

     (C) goods which in the opinion of the Director for Customs and Excise are of no commercial value; or

     (D)     goods imported under an international carnet; or

(iii) the goods are printed books, newspapers, journals and periodicals imported into Botswana by post of a value for duty purposes under the Customs and Excise Act not exceeding the amount specified in paragraph 9 of the Fifth Schedule;

     (e)      an import of goods which are not entered or are not required to be entered in terms of the Customs and Excise Act, where the goods are imported into Botswana from any specified country and are-

            (i)       goods referred to in paragraph (2)(d)(i) under Item Nos. 405.04, 406.00, 407.01, 407.02, 407.06, 412.02, 412.03, 412.04, 412.10, 412.11, 412.12, 470.01, 470.02, 480.00 and 490.00, to the extent indicated; or

           (ii)       goods referred to in paragraph (2)(d)(ii) or (iii), to the extent indicated;

     (f)       goods imported into or produced or manufactured in Botswana, exported therefrom to any specified country and thereafter directly returned to or brought back by the exporter without having been subjected to any manufacturing process, manipulation or modification and without a change in ownership, if such goods were acquired in Botswana before the commencement date or, where such goods were so acquired on or after that date, tax under this Act was paid in respect of the acquisition thereof; or

     (g)      goods which are shipped or conveyed to Botswana for transhipment or conveyance to any other country.

FOURTH SCHEDULE
TAX INVOICES, TAX CREDIT NOTES, AND TAX DEBIT NOTES

(Sections 23 and 24)

     1. Except as the Commissioner General may otherwise allow, a tax invoice as required by section 23 (1) shall contain the following particulars-

     (a)      the words "tax invoice" in a prominent place;

     (b)      the name, address, and VAT registration number of the registered person making the supply;

     (c)      for a supply to a registered recipient, the name, address, and VAT registration number of the recipient;

     (d)      the individualised serial number and the date on which the tax invoice is issued;

     (e)      a description of the goods or services supplied;

     (f)       the quantity or volume of the goods or services supplied; and

     (g)      the total amount of the tax charged, the consideration for the supply, and the consideration including tax.

     2. ......

     3. Except as the Commissioner General may otherwise allow, a tax credit note as required by section 24(1) shall contain the following particulars-

     (a)      the words "tax credit note" in a prominent place;

     (b)      the name, address, and VAT registration number of the registered person making the supply;

     (c)      the name, address, and VAT registration number of the recipient of the supply;

     (d)      the date on which the tax credit note was issued;

     (e)      the value of the supply shown on the tax invoice, the correct amount of the value of the supply, the difference between those two amounts, and the tax charged that relates to that difference;

     (f)       a brief explanation of the circumstances giving rise to the issuing of the tax credit note; and

     (g)      information sufficient to identify the taxable supply to which the tax credit note relates.

     4. Except as the Commissioner General may otherwise allow, a tax debit note as required by section 24(3) shall contain the following particulars-

     (a)      the words "tax debit note" in a prominent place;

     (b)      the name, address, and VAT registration number of the registered person making the supply;

     (c)      the name, address, and VAT registration number of the recipient of the supply;

     (d)      the date on which the tax debit note was issued;

     (e)      the value of the supply shown on the tax invoice, the correct amount of the value of the supply, the difference between those two amounts, and the tax that relates to that difference;

     (f)       a brief explanation of the circumstances giving rise to the issuing of the tax debit note; and

     (g)      information sufficient to identify the taxable supply to which the tax debit note relates.

FIFTH SCHEDULE
REGISTRATION THRESHOLD, INTEREST RATES, AND OTHER AMOUNTS

     1.       For purposes of section 16(1)(a) and (b), the amount is P250 000.

     2.       For purposes of section 22(1), the interest rate is 2 percent per month or part thereof, compounded monthly.

     3.       For purposes of section 23(2), the consideration shall not exceed P20.

     4.       For purposes of section 42(5)(a), the amount must exceed P50.

     5.       For purposes of section 42(10), the interest rate is 1 percent per month or part thereof, compounded monthly.

     6.       For purposes of section 43(1)(d), the minimum amount paid shall not be less than P500.00.

     7.       For purposes of the Second Schedule, paragraphs (1)(b) and (c)(ii), the amount must exceed P36 000.

     8.       For purposes of the Third Schedule, paragraph 2(d)(i), item 407.02, the amount for other new or used goods shall not exceed UA 500.

     9.       For purposes of the Third Schedule, paragraph 2(d)(iii), the value of the imports shall not exceed UA 400 per parcel.