Government policy is to diversify economic growth away from diamonds by encouraging tourism, export manufacturing, and financial services. Its sound economic and fiscal policies have maintained economic growth and low inflation since independence. After record growth rates in the post independence years, growth continued at 9% in the 1990s, though it is slowing in recent times.

Botswana's strong financial position has been recognised recently by being awarded an international sovereign credit rating. It received an A2 rating from Moody's and an A rating from Standard and Poors. These ratings are among the highest for any African or developing country.

Botswana offers a secure environment for foreign capital with liberal and flexible investment policies. There is no restriction on ownership, size of investment, sources of funds, marketing products or methods of training.

Residents as well as non-residents are free to operate foreign currency accounts at local banks. Investors can repatriate dividends and profits from Botswana freely.

The mandate of the International Economic Policy Coordination (IEPC) Unit within the Division of Economic and Financial Policy is to mobilize funding for development projects from multilateral donor and financing agencies as well as coordinate activities of multilateral and regional organizations.  The Unit also provides professional advice on international and regional cooperation between Botswana, International Community and regional organizations such as SADC, African Development Bank, United Nations Economic Commission for Africa, African Union, etc. The Unit is also responsible for the coordination of the SADC Regional Economic Agenda at national level.  As the SADC Contact Point (NCP) for Botswana, the Unit acts as the Secretariat of the SADC National Committee (SNC) and therefore coordinates and monitors the implementation of the SADC regional economic integration agenda at national level for Botswana.

Extensive changes were introduced to Botswana's taxation system in 1995/7 to enhance the incentives for domestic and foreign investment, improving competitiveness and increasing the disposable income of individual taxpayers. The top personal tax rate was brought into line with the corporate rate of 25%. In the budget of 2001 the rate for top marginal tax was increased to P100,000, with no tax to pay up to P25,000.

From 1999 a new non-negotiable mining tax formula was introduced in order to provide international investors with greater certainty. A variable rate income tax was introduced with parameters set at internationally competitive levels, between a minimum of 25% and a maximum of 55%.

Value Added Tax
Value Added Tax was introduced to replace sales tax from July 2002. It was set at a uniform rate of 10% applied to all goods and services. Its aim is to broaden the government's revenue base. Traders with an annual turnover exceeding P250,000 are required to register for VAT. VAT applies to almost all goods and services supplied. The list of exempt and zero rated supplies is very limited. All queries should go to:

Department of Customs and Excise
PB 0041, Gaborone
Tel: 322 855 or 364 2100
Toll free: 0800 600 702
E-mail: vat@gov.bw

Business licenses are granted by the Ministry of Trade and Industry to investors who can produce evidence that they have sufficient funds available on deposit in Botswana. Renewals of licenses need certified audited financial statements and accounts prepared in accordance with international financial accounting standards. The processing of applications normally takes four weeks and licenses are issued a week later. Among the licenses required are:

• Industrial (manufacturing) licenses
• Trading licenses
• Wildlife and National Parks licenses
• Financial service licenses