Tax Incentives in Botswana, Lesotho and Swaziland

As part of the effort towards accelerating job creation in industry each of the National Development Plans of Botswana, Lesotho and Swaziland (BLS) offers a package of tax incentives which, although applicable also to domestic investors, is mainly aimed at inducing foreign investors. The inducement-effect of tax-incentives is only one aspect of the policy. The other aspect involves the amount of potential tax-revenues that the governments forego as a con-sequence of offering the incentives. This essay investigates both of these aspects in the context of BLS. The intention is to determine whether BLS as a group can minimize their tax revenue-losses without reducing the aggregate inflow of foreign investment. The analysis is based on the findings of previous studies in other less developed countries (LDCs); of a study on industrialization in Swaziland; discussions with officials in the Industrial Development Corporations (IDCs) of BLS; economic rationale of tying tax incentives to labor, rather than capital, in the context of BLS; and the desirability of harmonizing tax incentives policies among BLS. Notes, tab.

Title: Tax Incentives in Botswana, Lesotho and Swaziland
Author: Matsebula, Michael S.
Year: 1979
Periodical: Journal of Southern African Affairs
Volume: 4
Issue: 1
Period: January
Pages: 45-54
Language: English
Geographic terms: Botswana
Lesotho
Swaziland – Eswatini
Abstract: As part of the effort towards accelerating job creation in industry each of the National Development Plans of Botswana, Lesotho and Swaziland (BLS) offers a package of tax incentives which, although applicable also to domestic investors, is mainly aimed at inducing foreign investors. The inducement-effect of tax-incentives is only one aspect of the policy. The other aspect involves the amount of potential tax-revenues that the governments forego as a con-sequence of offering the incentives. This essay investigates both of these aspects in the context of BLS. The intention is to determine whether BLS as a group can minimize their tax revenue-losses without reducing the aggregate inflow of foreign investment. The analysis is based on the findings of previous studies in other less developed countries (LDCs); of a study on industrialization in Swaziland; discussions with officials in the Industrial Development Corporations (IDCs) of BLS; economic rationale of tying tax incentives to labor, rather than capital, in the context of BLS; and the desirability of harmonizing tax incentives policies among BLS. Notes, tab.