VAT exemption on first time home owners suspended

Portia Nkani - BG reporter
Monday, 12 October 2015
VAT exemption on first time home owners suspended

Three years after Cabinet passed the bill to abolish Value Added Tax on property for first time buyers, the provision has to this day not been implemented.The issue was later highlighted in the 2013/14 budget speech by finance and development planning minister, Kenneth Matambo.

Why has the provision not been implemented? The budget was passed and the legislators now have to give feedback on the progress to their electorates, what do they say now? What do we say to the younger population that is still struggling to own properties? Was this not discussed before the budget and bills were passed? These are some of the questions that Botswana Unified Revenue Service, Commissioner General, Keneilwe Morris had to face this Tuesday when parliament’s committee on statutory bodies, led by Moyo Guma grilled him.

Morris however indicated that the Ministry’s stance was that it was not going to be easy to administer the provision nationally. Further in an inquiry by BG, Morris indicated that when it was later discussed, it was realised that it is more complex than imagined. “How do you determine the first time home owner? There will be a first time home owner who will go buy from BHC and that who has his own plot and buys his own building material,” he said. He indicated that queries that popped up were how to establish that an individual has bought material from a VAT registered party. “How do you monitor the supply? You who buy from a registered VAT person will only benefit,” he added.

He stated that this is a matter that affects other stakeholders such as the finance ministry and lands and housing ministry. “Our technical advice as BURS was that let us work on it so that ultimately those deserving are benefiting from their entitlement. We don’t decide who should be exempted and not. If you come up with a policy like this there are potential implications,” he said. The discussions as a result have led to the delay of the provision to be implemented.

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