Botswana has enacted/promulgated the Income Tax Amendment Act of 2024, effective 15 January 2024. The amendments increase the tax exemption from one third to 50% for certain lumpsums received by an employee, below is summary of the changes:
- Gratuity or severance pay - the exemption is increased from one third to 50% of the gratuity or severance pay.
- Gratuity under a contract of employment - the exemption is increased from one third to 50% of the gratuity.
- Bonuses or gratuity paid to a non-resident under a contract of employment - the exemption is increased from one third to 50% of the bonus or gratuity.
- Retrenchment Packages - the exemption is increased from one third to 50% of the retrenchment package.
- Pension lump sum - the exemption is increased from one third to 50% of the pension withdrawal.
- Annual pension or annuity – the exemption is increased from P500 to P20 000.
Click Here for The Income Tax Amendment Act of 2024
System Changes :
Important Note
In Sage 300 People there are no changes required to the current BWA-Generic Tax.xml file .
Therefore to ensure compliance, the responsibility remains with the user to capture the taxable portion on the Payroll Definition with Tax Type = Periodic and the Non-Taxable portion on the Payroll Definition with Tax Type = Never
On the Navigation Pane
Expand Company Management
Expand Payroll Definitions
Double Click Earning Definitions
Earning Definition Type :Severance Pay Non Taxable 
Earning Definition Type :Severance Pay Taxable 
Important Note:
This is applicable to the following three Earning Types (which all have both Periodic and Never Taxable Tax Types):
GRATRR - Gratuity - Retirement/Retrenchment
SEVERANCE - Severance Pay
RETRENCH - Retrenchment Package Lump Sum
Note:
If customers have custom calculations linked to the Payroll Definitions, that automatically calculates this, the user needs to update the calculations to accommodate the taxable and non-taxable portion 50% split.
Click Here to contact the Sage 300 People customer support team if you have any questions .