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No-one pays personal tax at 25%!


Well, I know the topic of today’s article may have got you confused a little bit but don’t worry, you will be settled by the time you finish reading. Most of you may know that individuals are taxed at sliding scales and any income above P12 000/month or P 144 000/annum is taxed at 25%. So, that alone gives people the impression that high income-earners pay tax at 25%. Well, that is not entirely true as there is something called effective tax rate, which I will analyse below.

And if you missed one of my earlier articles, I once wrote and demonstrated that Botswana has the 2nd lowest rate for high-income earning individuals in SADC, after Mauritius whose rate stands at 15%. I then emphasised in that article that Botswana is generally a low tax regime and that directly translates into higher disposable incomes for its citizens and residents. Count yourself better off with the current tax rates; otherwise any increase will drill holes into your pockets.

If you want to know how heavy personal tax can be, call high income earners in RSA and Zimbabwe and they will tell you that they pay tax at 45% and 50%, respectively. Now, that’s massive! Let me begin with a brief as to how personal tax works in Botswana, before I go to effective tax rate. In this article, words importing the masculine shall be deemed to include the feminine.


Personal tax is tax that is levied on income earned by an individual whether from employment, investments, partnerships or from a business run by a sole trader. Technically, personal tax is a direct tax which is chargeable on a particular individual based on the income that they earn. Employees get PAYE deducted on a monthly basis by their employers but that is income tax in their hands. Individuals are taxed using the individual tax tables which exempts the first P36 000/annum from tax. This explains why employers don’t deduct PAYE from employees who earn not more than P 3 000/month. The next P36 000 above the exempt P 36 000 is taxed at 5%, followed by 12.5%, 18.75% and the excess above P 144 000 is taxed at 25%.

An individual who earns more than P 36 000/annum is required by the Income Tax Act to register with BURS for income tax and file income tax returns by 30 September of each year. Any tax that may be due is only payable within 30 days of receiving a notification from BURS that an assessment would have been issued. Individuals are not legally required to pay tax before an assessment is issued, although they may, for convenience, choose to do so.

And by the way, an employee may instruct his employer to deduct more PAYE to cover for tax from his other income such as rentals. The employer has nothing to lose by making these additional deductions as PAYE is money deducted from the employee. To close this paragraph, a partner cannot suffer PAYE from salaries drawn from a partnership as PAYE can only be deducted by an employer. A partner in a partnership is not technically employed by anyone; rather, partners are self-employed.


There is something which we call the effective tax rate. This is not anything complicated but it is merely an expression of the total tax charge as a percentage of the total income earned by a taxpayer. I narrate below the reasons why non-one in this country ever pays personal tax at an effective tax rate of 25%:

1st P36 000 isn’t taxed: I stated above that the first P36 000 is exempt from personal tax. Now, that has the effect of pulling down the effective tax rate as not all your income is subject to tax. In other words, the first P 36 000 is taxed at 0%. Staggered rates: Any amount above the first P36 000 is taxable but again, the rates are much lower than 25%, being 5% for the next P36 000 above the non-taxable P 36 000, 12.5% for the next P36 000 above the 5% bracket, 18.75% on the next P36 000.

The last bracket, being anything above P12 000/month or P 144 000 per annum is then subject to tax at 25%. You don’t have to be a rocket scientist to understand the above; all I am saying is that there are layers of lower tax rates below the 25% threshold and the effect of that is a reduced effective tax rate.


By way of conclusion, let me use figures to show you the effective tax rates for different incomes. For example, a person who earns P 180 000/annum pays tax at an effective tax rate of 12.25% whilst the effective tax rate on income of P 360 000/annum is 18.625%. On the extreme side, someone who earns P10m/annum pays tax at an effective rate of 24.771%.

Ok, how many people do you know who earn more than P10m a year? Very few or none, I guess. But no matter how much one earns, they will never pay tax at an effective rate of 25% for the reasons stated above. Like I stated above, I did not write this article for any other purpose but to help you appreciate that the 25% tax rate is there on paper but no-one pays personal tax at an effective rate of 25%, no matter how much they earn.

Don’t ever think that I am advocating for individual tax rates to be increased. I can’t do that folk; I am tax consultant and not a taxman. I am on your side. Well folks, I hope that was insightful. As Yours Truly says goodbye, remember to pay to Caesar what belongs to him. If you want to join our Tax Whatsapp group, send me a text on the cell number below. Jonathan Hore is the Managing Tax Consultant of Aupracon Tax Specialists and feedback can be relayed to or 7181 5836. This article is of a general nature and is not meant to address particular matters of any person.

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Export Processing Zones: How to Get SEZA to Sizzle

23rd September 2020
Export Processing Zone (EPZ) factory in Kenya

In 2005, the Business & Economic Advisory Council (BEAC) pitched the idea of the establishment of Special Economic Zones (SEZs) to the Mogae Administration.

It took five years before the SEZ policy was formulated, another five years before the relevant law was enacted, and a full three years before the Special Economic Zones Authority (SEZA) became operational.

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Egypt Bagged Again

23rd September 2020

… courtesy of infiltration stratagem by Jehovah-Enlil’s clan

With the passing of Joshua’s generation, General Atiku, the promised peace and prosperity of a land flowing with milk and honey disappeared, giving way to chaos and confusion.

Maybe Joshua himself was to blame for this shambolic state of affairs. He had failed to mentor a successor in the manner Moses had mentored him. He had left the nation without a central government or a human head of state but as a confederacy of twelve independent tribes without any unifying force except their Anunnaki gods.

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23rd September 2020

If I say the word ‘robot’ to you,  I can guess what would immediately spring to mind –  a cute little Android or animal-like creature with human or pet animal characteristics and a ‘heart’, that is to say to say a battery, of gold, the sort we’ve all seen in various movies and  tv shows.  Think R2D2 or 3CPO in Star Wars, Wall-E in the movie of the same name,  Sonny in I Robot, loveable rogue Bender in Futurama,  Johnny 5 in Short Circuit…

Of course there are the evil ones too, the sort that want to rise up and eliminate us  inferior humans – Roy Batty in Blade Runner, Schwarzenegger’s T-800 in The Terminator,  Box in Logan’s Run,  Police robots in Elysium and  Otomo in Robocop.

And that’s to name but a few.  As a general rule of thumb, the closer the robot is to human form, the more dangerous it is and of course the ultimate threat in any Sci-Fi movie is that the robots will turn the tables and become the masters, not the mechanical slaves.  And whilst we are in reality a long way from robotic domination, there are an increasing number of examples of  robotics in the workplace.

ROBOT BLOODHOUNDS Sometimes by the time that one of us smells something the damage has already begun – the smell of burning rubber or even worse, the smell of deadly gas. Thank goodness for a robot capable of quickly detecting and analyzing a smell from our very own footprint.

A*Library Bot The A*Star (Singapore) developed library bot which when books are equipped with RFID location chips, can scan shelves quickly seeking out-of-place titles.  It manoeuvres with ease around corners, enhances the sorting and searching of books, and can self-navigate the library facility during non-open hours.

DRUG-COMPOUNDING ROBOT Automated medicine distribution system, connected to the hospital prescription system. It’s goal? To manipulate a large variety of objects (i.e.: drug vials, syringes, and IV bags) normally used in the manual process of drugs compounding to facilitate stronger standardisation, create higher levels of patient safety, and lower the risk of hospital staff exposed to toxic substances.

AUTOMOTIVE INDUSTRY ROBOTS Applications include screw-driving, assembling, painting, trimming/cutting, pouring hazardous substances, labelling, welding, handling, quality control applications as well as tasks that require extreme precision,

AGRICULTURAL ROBOTS Ecrobotix, a Swiss technology firm has a solar-controlled ‘bot that not only can identify weeds but thereafter can treat them. Naio Technologies based in southwestern France has developed a robot with the ability to weed, hoe, and assist during harvesting. Energid Technologies has developed a citrus picking system that retrieves one piece of fruit every 2-3 seconds and Spain-based Agrobot has taken the treachery out of strawberry picking. Meanwhile, Blue River Technology has developed the LettuceBot2 that attaches itself to a tractor to thin out lettuce fields as well as prevent herbicide-resistant weeds. And that’s only scratching the finely-tilled soil.

INDUSTRIAL FLOOR SCRUBBERS The Global Automatic Floor Scrubber Machine boasts a 1.6HP motor that offers 113″ water lift, 180 RPM and a coverage rate of 17,000 sq. ft. per hour

These examples all come from the aptly-named site    because while these functions are labour-saving and ripe for automation, the increasing use of artificial intelligence in the workplace will undoubtedly lead to increasing reliance on machines and a resulting swathe of human redundancies in a broad spectrum of industries and services.

This process has been greatly boosted by the global pandemic due to a combination of a workforce on furlough, whether by decree or by choice, and the obvious advantages of using virus-free machines – I don’t think computer viruses count!  For example, it was suggested recently that their use might have a beneficial effect in care homes for the elderly, solving short staffing issues and cheering up the old folks with the novelty of having their tea, coffee and medicines delivered by glorified model cars.  It’s a theory, at any rate.

Already, customers at the South-Korean  fast-food chain No Brand Burger can avoid any interaction with a human server during the pandemic.  The chain is using robots to take orders, prepare food and bring meals out to diners.  Customers order and pay via touchscreen, then their request is sent to the kitchen where a cooking machine heats up the buns and patties. When it’s ready, a robot ‘waiter’ brings out their takeout bag.   

‘This is the first time I’ve actually seen such robots, so they are really amazing and fun,’ Shin Hyun Soo, an office worker at No Brand in Seoul for the first time, told the AP. 

Human workers add toppings to the burgers and wrap them up in takeout bags before passing them over to yellow-and-black serving robots, which have been compared to Minions. 

Also in Korea, the Italian restaurant chain Mad for Garlic is using serving robots even for sit-down customers. Using 3D space mapping and other technology, the electronic ‘waiter,’ known as Aglio Kim, navigates between tables with up to five orders.  Mad for Garlic manager Lee Young-ho said kids especially like the robots, which can carry up to 66lbs in their trays.

These catering robots look nothing like their human counterparts – in fact they are nothing more than glorified food trolleys so using our thumb rule from the movies, mankind is safe from imminent takeover but clearly  Korean hospitality sector workers’ jobs are not.

And right there is the dichotomy – replacement by stealth.  Remote-controlled robotic waiters and waitresses don’t need to be paid, they don’t go on strike and they don’t spread disease so it’s a sure bet their army is already on the march.

But there may be more redundancies on the way as well.  Have you noticed how AI designers have an inability to use words of more than one syllable?  So ‘robot’ has become ‘bot’ and ‘android’ simply ‘droid?  Well, guys, if you continue to build machines ultimately smarter than yourselves you ‘rons  may find yourself surplus to requirements too – that’s ‘moron’ to us polysyllabic humans”!

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