Financial transaction tax: another way to broaden revenue

As the government looks for ways to broaden its revenue base and combat the country’s ever-widening deficit, it has been advised to consider introducing another form of tax.

Financial Transactions Tax (FTT) is a levy on a specific type of financial transaction.

It is considered a better alternative to increasing Value Added Tax (VAT).

According to local tax consultant, Jonathan Hore, FTT can be levied on transactions such as: ATM withdrawals and deposits, sale and purchase of shares, issuance of loans by banks and other financial institutions as well as other related transactions.

Currently, Egypt, Zimbabwe and South Africa are the only African nations to impose such a tax.

However, Hore feels Botswana could benefit massively from the levy, as the volumes of financial transactions that take place in the country are huge.

“For example, try to imagine how many people swipe when they purchase groceries, fuel, etc or how many EFTs or e-wallet transactions are made in a day,” he said.

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