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:

1. Gratuity or severance pay - the exemption is increased from one third to 50% of the gratuity or severance pay.
2. Gratuity under a contract of employment - the exemption is increased from one third to 50% of the gratuity.
3. 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.
4. Retrenchment Packages - the exemption is increased from one third to 50% of the retrenchment package.
5. Pension lump sum - the exemption is increased from one third to 50% of the pension withdrawal.
6. Annual pension or annuity – the exemption is increased from P500 to P20 000.

Payroll setup will have to reviewed and the changes implemented. Contact your accredited Business Partner for assistance .

Take note: The changes are only setup related, no new tax files will be released by Sage for these changes.