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Tax incentives for SPEDU companies

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The Minister of Finance and Economic Development, Kenneth Matambo has said plans are underway to introduce a specific regional tax incentive through which companies operating in the Selibe Phikwe Economic Diversification Unit (SPEDU) will be granted the Development Approval Orders. Matambo told parliament this week that his ministry together with that of Investment, Trade and Industry, is busy finalising this instrument.

“Under this tax incentive, companies that are approved as SPEDU companies will be taxed at a rate of 5 percent for the first five years after coming into effect of the Development Approval Order for existing companies and at a tax rate of 10 percent thereafter,” he told parliament. This incentive forms part of the Selibe Phikwe Revitalisation Strategy. Minister Matambo was responding to specially elected MP, Bogolo Kenewendo’s inquiry on what state incentives the Ministry provides for investment outside Gaborone to other urban centres.

Kenewendo also wanted to establish which regional specific tax incentives would be introduced. As a norm, the government provides infrastructure including roads, power, telecommunications and water to all areas in Botswana to make the areas attractive to investors. With regards to Income Tax Act, Matambo said there are tax incentives provided and they apply across all taxpayers who qualify for such incentives elsewhere. These he said, are expected to encourage investment since taxpayers are able to re-invest the amounts they saved as a result of reduced tax burden.

Tax incentives currently offered under Income Tax Act are; Development Approval offered on a case to case basis on application by tax payers. This may include a tax holiday, a reduced tax rate for a limited number of years and accelerated depreciation or capital allowance. Another tax incentive is the Sector Specific Development Approval Orders- offered to companies that are currently offered reduced tax rates and registered under the Botswana Innovation Hub and International Financial Services Centre. Companies approved for these tax incentives are granted a reduced tax rate of 15 percent as opposed to the current corporate tax rate of 22 percent.

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ADB grants BDC P4m for capacity building

Koobonye Ramokopelwa

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BDC head of human capital, Thabile Moipolai

African Development Bank has granted Botswana Development Corporation (BDC) over P4 million for training and capacity building of its staff members, the latter’s Managing Director, Bashi Gaetsaloe has disclosed.

The grant, which is $400,000 could not have come at a better time for BDC which has just begun a foray into the African continent. According to the Head of Human Capital at the investment arm of government, Thabile Moipolai, the grant will be used in areas such as investment, legal and risk, the three divisions which are considered critical as they continue to push the five -year strategy.

BDC has been given the leeway to invest outside Botswana and already some investments are being made in West Africa. Capacitating the staff in the above areas will come in handy for the African expansion.

Moipolai was answering a question from The Midweek Sun on Friday during the company’s annual stakeholder briefing where operational and financial reports for 2017/2018 were made public. The grant will be utilised in the next two years. BDC has reiterated its plan to continue to invest initiatives which are aimed at developing and retaining staff members.

“As we continue to build a strong BDC for the future, continuous learning and development is critical for our business success and therefore remains a priority area for Human Capital,” BDC 2017 annual report reads.

BDC has also developed a future focused competency based training that will be used to make informed learning and development decisions. “The (BDC) academy will also help BDC produce future leaders that are fluid and progressive through a bespoke leadership development,” reads the report.

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KBL announces return of Kickstart program

Koobonye Ramokopelwa

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Previous kickstart beneficiaries

Kgalagadi Breweries Limited, a unit of Sechaba has announced the return of Kickstart, a youth entrepreneurial development program that was suspended three years due to lack of financial resources, Managing Director, Renaud Beauchamp has told the media.

Before the program was put on ice, it had benefited over 70 small medium enterprises with funding, mentoring and market access assistance. According to Beauchamp, the revamped Kickstart will start next year, with an annual budget of about P1, 5 million. “We plan to invest in 15 new businesses every year,” he said at a press briefing which also announced a price reduction for its alcohol brands such as St Louis, Castel Lite and Black Label.

Successful applicants will receive about P200, 000 grants to execute their business ideas. Beauchamp stated that, they have been able to reintroduce Kickstart from ‘freed capital’ as a result of the recent reduction in Alcohol Levy from 55 percent to 35 percent. The clear beer price reduction comes after the Alcohol Levy, which made beer expensive, was slashed by President Mokgweetsi Masisi regime some few months ago.

Meanwhile, Assistant Minister of Trade, Industry and Investment has announced changes in trading hours for businesses that trade with liquor.

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