Africa-Press – Botswana. Government does not have any immediate plans to cancel the four per cent withholding tax borne by farmers when they sell their livestock to slaughter facilities and feedlots.
This was said by Minister of Finance, Honourable Peggy Serame when answering a question in Parliament on Tuesday.
Minister Serame, however, said the ministry would continue to engage with Botswana Unified Revenue Service (BURS) and livestock associations to seek alternative ways and modalities of addressing livestock farmers concerns regarding the four per cent withholding tax.
She said it was expected that the concerns around the matter would be addressed substantively as part of the ongoing holistic review of tax laws.
She indicated that Botswana Meat Commission (BMC) was, in the past as a cooperative, responsible for paying four per cent withholding tax to government on behalf of the farmers who sold cattle to it.
Ms Serame said tax was deducted from the BMC earnings as part of tax due to the commission prior to paying those farmers that sold their cattle to it.
“This was seen as unfair to those farmers in view of the fact that there were other dealers who bought cattle from farmers and such dealers were not required to withhold tax from farmers for cattle sold,” Ms Serame said.
Minister Serame said in 2015 government introduced a four per cent withholding tax on purchase of livestock for slaughter and for feeding through an amendment of the Income Tax Act in efforts to ensure equity and fairness in livestock industry.
“Following the amendment, when livestock dealers including BMC purchased cattle from farmers, they withheld four per cent of the price which they would then pay to BURS,” she added.
She said government through various programmes and interventions supported livestock farmers through free vaccination against livestock disease and ongoing livestock feed programme and medical subsidy.
Moreover, Ms Serame said government introduced these interventions to assist livestock farmers and the four percent withholding tax may be seen as the farmers’ modest contributions to such programmes.
Member of Parliament for Ghanzi South, Mr Motsamai Motsamai, had asked the minister if she would consider cancelling four per cent levy change for farmers as they accounted for different charges regarding livestock development.
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