Capital city: Gaborone
GDP: USD$15.6 billion
GDP per capita: USD$6,932
Botswana is a landlocked country located in Southern Africa, which is bordered by South Africa, Namibia, Zimbabwe and Zambia. Botswana is topographically flat, with up to 70 percent of its territory being the Kalahari Desert.
Botswana’s economy is dominated by mining, cattle, and tourism. Botswana has one of the fastest growing economies in the world, averaging 9% pa since 1966, and boasts a per capita GDP of $18,825. Botswana’s Orapa mine is the largest diamond mine in the world and produces over 11 million carats annually (valued at $1.6 billion).
As Botswana operates on a territorial basis, companies in Botswana pay tax only on income that is derived from a source in Botswana. Botswana sourced income is taxed at 25%, although a reduced rate of 15% applies to qualifying Botswana Investment and Trade Centre companies. The 15% tax rate only applies to profits from approved business activities, such as banking, accounting, investment advice, insurance, and other finance-related operations.
In addition, the Botswana Development Approval Order (DAO) offers zero-rate tax holidays for 5 to 10 years for business projects that stimulate the country’s economic and social development. DAO projects are aimed at reducing the consumer prices and involving Botswana citizens in entrepreneurial activities.
"You’d be stupid not to try to cut your tax bill and those that don’t are stupid in business"
- Bono: U2