The Minister of Finance and Development Planning, Kenneth Matambo has said it would be of mutual benefit if Chinese textile and other investors could set up manufacturing plants in Botswana.
He said this prior to the signing agreement of Double Taxation Avoidance Agreement (DTAA) between Botswana and China last week. “There is a notable level of trading between the two countries, nonetheless there is still a lot of untapped opportunities for investment especially in sectors such as manufacturing that need to be exploited,” said Matambo.
China is among the leading countries in the textile industry. “Our country offers a lot of advantages for investors amongst them the lowest tax rates in the region, no foreign exchange controls, and low levels of crime,” said Matambo.
Just three weeks ago, the Ministry of Agriculture agreed on the capacity building in training programmes for its experts in different agriculture fields. To this end, the ministry invited Chinese investors to come and set up manufacturing factories in Botswana so to supply farming equipment.
Meanwhile, Dr Taufila Nyamadzabo, the Secretary for Economic and Financial Policy told Gazette Business that there are already thirteen agreements active in the DTAA and two are yet to be presented in Parliament for approval. “We have also talked with Belgium and Israel and they have not responded yet and more countries are yet to be considered for the same agreement,” he said.
The signed double taxation avoidance agreement is meant to remove or minimize double taxation of incomes of residents of one country earned in another country.
“Country A may have a right to tax income sourced in Country B because the income was earned by a resident of Country A while Country B may also have a right to tax the same income because it was earned within its borders,” Nyamadzabo explained. It also facilitates close co-operation and exchange of information between the tax authorities and addresses the problem of international tax evasion. It also attracts direct foreign investment.
Chinese Minister said the two countries have a long history of friendship and as such, the agreement “will further enhance the environment of trade and investment.”