Question

3. Explain any three (3) tax incentives given to the business of farming in Botswana. You are to explain the incentives with one suitable illustration.

Answer 1

Tax incentives given to the business of farming in Botswana are :

1) Companies engaged in Farming activities are entitled to get special deduction on capital expenditure made by them are:

- Farm development expenditure incurred during the year.

- Expenses paid for prevention of soil erosion , developing and construction of irrigation systems etc.,

- Cost of plantation of trees, building up of roads facilities for farming activities.

- Loss of farming activities can be carried forward for Five years.

2) Value Added Tax : in this the tax rate is exempted on the supply of tractors for farming purposes. For some export supplies of food product like millet, wheat, sugar , etc., are treated as zero rated supplies. tax rate will be 0%

3) Supplies made within South Africa, Botswana, Lesotho, Namibia and Swaziland are exempt from Customs and Excise duties.