20 Tax Mistakes Botswana Businesses Should Avoid

BURS does not need to catch you doing something wrong to cost you money — an ordinary missed deadline or a badly formatted invoice does the job quietly. The twenty mistakes below account for almost every penalty, assessment and dispute we help Botswana businesses resolve. (For the framework behind these rules, read our Botswana Business Tax Guide first.)

1. Filing late — or not at all

The most common and most avoidable mistake. Every late return adds penalties; every missing return invites an estimated assessment where BURS decides your income for you. Fix: a managed statutory calendar — ACCTAB clients never track a deadline themselves.

2. Registering late

Trading before registering for income tax, or hiring before registering as an employer, creates a backlog that must eventually be confessed. Fix: register at the start — it is quick and free compared to the cleanup.

3. Missing the VAT threshold moment

Turnover crosses P1,000,000 and nobody notices — but the obligation to register (and account for VAT) starts anyway. VAT assessed later comes out of your pocket, since you never charged customers. Fix: monitor rolling turnover monthly; ACCTAB flags the threshold as part of monthly accounting.

4. Charging VAT while unregistered

The reverse error: adding "VAT" to invoices without registration. That money is not yours, and collecting it unlawfully creates serious exposure. Fix: charge VAT only once registered — never before.

5. Claiming input VAT on invalid invoices

An invoice missing required details — supplier VAT details, the words identifying a tax invoice, date, description, VAT amount — supports nothing. Reviews routinely disallow such claims wholesale. Fix: check invoices at receipt, not at review time.

6. Confusing zero-rated and exempt supplies

Zero-rated supplies allow input VAT recovery; exempt supplies do not. Misclassifying your sales corrupts every return you file. Fix: get your supply classification confirmed professionally once — it repays itself every period.

7. PAYE on outdated tables

Tax bands change with budgets; payrolls that keep using last year's tables under- or over-deduct all year. Fix: update tables every budget cycle — automatic when payroll is professionally run.

8. "Net salary" agreements

Promising an employee "P5,000 in hand" without grossing up means PAYE is an afterthought — and the shortfall lands on the employer. Fix: agree gross salaries, always.

9. Untaxed employee benefits

Housing, vehicles and allowances are frequently taxable in employees' hands and frequently left out of PAYE. Fix: have every benefit's tax treatment confirmed before it is granted.

10. Late PAYE and withholding remittance

Money deducted from salaries or withheld from payments is BURS's money in your custody. Paying it late is treated more severely than almost any other lapse. Fix: remit by the 15th, without exception.

11. Poor bookkeeping behind the return

A tax return is only as good as the books beneath it. Unreconciled, incomplete records produce wrong returns in both directions. Fix: monthly bookkeeping with bank reconciliations — the foundation of every safe filing.

12. No receipts

Undocumented expenses are deductions at risk: BURS can disallow them and tax you on profit you never kept. Fix: photograph every receipt the day you spend; pay electronically so the bank statement is your second witness.

13. Claiming personal expenses

School fees, family groceries and the weekend trip do not belong in the business's books. When found, they are disallowed — with penalties, and with your credibility for every other claim damaged. Fix: a clean owner/business split with recorded drawings.

14. Missing legitimate deductions

The silent opposite: businesses overpaying tax for years by failing to claim home office proportions, business use of private vehicles, bad debts written off, or pre-trading costs. Fix: a professional preparer whose job is finding every legal deduction — this alone often pays ACCTAB's fee.

15. Forgotten capital allowances

Vehicles, equipment and machinery earn annual capital allowances — but only if an asset register exists to support the claim. Fix: maintain the register; claim every year.

16. Cash sales off the books

Understating income is not a grey area — it is evasion, with penalties and potential prosecution, and it simultaneously destroys your ability to borrow or sell the business. Fix: record everything; use legal planning, not concealment, to manage tax.

17. Ignoring withholding tax obligations

Paying rent, dividends, certain fees or non-resident suppliers without checking the withholding position leaves you liable for tax you should have withheld. Fix: check the position before the first payment of any new category.

18. Mishandled import taxes

Customs duties and import VAT have their own rules and paperwork; errors inflate landed cost or forfeit recoverable VAT. Fix: confirm full landed cost and VAT recoverability before pricing imported stock.

19. Ignoring BURS correspondence

Letters unanswered become assessments; assessments unobjected become final. Objection windows are strict and short. Fix: respond to everything, immediately, through a professional. ACCTAB represents clients in all BURS engagement.

20. Letting penalties and interest snowball

Old tax debt grows relentlessly — interest often ends up exceeding the original tax. Waiting never improves it. Fix: quantify, negotiate an arrangement, and stop the clock. Voluntary regularisation is always treated better than discovery.

Frequently Asked Questions