Last week we looked at a scenario in which an expatriate started working for a company in the month of June which happens to be the last month of the tax year.
We learnt that as long as the company has evidence that the taxpayer has just started working in Botswana, they could use the tax table provided by the Commissioner General to collect tax from him as a nonresident. In accordance with the Act this would be to the right tax. No need to make an enquiry when you have first hand information about the taxpayer and the tax table to guide you on how much you should collect tax.
However if the taxpayer was recruited locally, then chances are that he might have been working elsewhere in the country which job may have made him fall on a higher tax bracket.  In that regard, the taxpayer will have to communicate that additional information to the new employer and pay tax at an appropriate rate. This entails charging him at a resident rate after considering the length of period of physical presence in Botswana during the tax year. If he is classified as a resident then he is entitled to P30000 tax-free band (last week’s typo corrected. Thanks to Balang’s email)
This week’s question goes thus; “Are SMME’s who have been issued with a Tax Clearance Certificate allowed to charge VAT for the services they offer or are the two regimes distinctly separate of each other? (I.e. can they collect VAT whilst they have been exempted?) MZK.
Solution:
A tax clearance certificate is issued by BURS annually for tendering purposes. Usually when you tender to Local government and central government you are required to prove that you are a good taxpayer by bringing a tax clearance certificate. Each year contractors and other companies apply for a fresh certificate or renewal of the existing certificate.
BURS will then go through your tax records for VAT, Income tax and customs & excise, and check if you owe any amount. If you don’t owe, you get a tax clearance certificate. If you owe any of the taxes, they will ask you to pay or make payment arrangements before obtaining the certificate.
If you are not registered for PAYE because all your employees earn less than P30 000, or you are not registered for VAT because you make taxable supplies that are less than P500 000, BURS will still give you the tax clearance.
With the tax clearance certificate, BURS is assuring government that you are a good taxpayer worthy of contracts from government.
It does not say you are exempt from tax. Therefore if you are VAT registered, you will still be expected to charge output tax for your goods and services, and submit Vat returns on due dates.
Likewise if you are registered for Income Tax, you should continue to estimate your liabilities, pay SAT installments, where necessary, and submit returns when they become due. 
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