NON-CORPORATE BUSINESSES

Non-Corporate Businesses
• These are business not operated as companies.
• They are characterized with unlimited liabilities.
• These businesses and the owners are the same
entity.
• The two types of Non cooperate businesses are;
- Sole Proprietorship
- Farming
- Partnership
Non Corporate Businesses Tax Submission
•The tax year end in Botswana is 30th of June.
•All Individuals and Non Corporate entities must submit their tax returns within 3
months after the tax year end. i.e. by 30th September each year.
•This is regardless of the account year end used by business. i.e. Tax return must
be submitted by the next 30th September following the account year end.
•This is also regardless of weather the business traded for 12 months, less or
more than 12 months.
•However were there is a change in tax rates between the tax periods, the CG
requires that the rate change is incorporated in computation to avoid loss of tax.
•Where there is business liquidation or cessation, BURS must be informed at the
last tax submission following business cessation.
•See examples pg 73, study text
 Farmers
Chargeable Farming
- In Pastoral farming (farming for slaughter) is
chargeable to tax if livestock heads exceed 300
cattle ( 6 sheep/ goat equates 1 cattle head).
- Arable (dry land) farming is chargeable to tax
if farm land exceeds 100 hectares.
See example pg. 77, study text
 Exempt Farming
• Dairy farming
• Pastoral farming of 300 or less cattle heads.
• Dry land farming of 100 or less hectares of
land.
 Optional Charging
• An exempt farmer may optionally opt to be
taxable.
• An application is made to CG within 6moths after
the tax year end i.e. before 30th December each
year.
• If approved, it is irrevocable.
• The option may be made so as to receive priority
in government farming deals and projects over
the farmers who do not opt for tax.
 Livestock Valuation
• The farmer is at liberty to chose any of the following
method of livestock valuation;
- Cost price
- Market price
- Relevant Standard Value (RSV) Amendable each tax
year. See page 79, study tax for table of standard value.
• Any chosen method cannot be revoked or else an
application is made to CG specifying good reasons for
change.
 Exempt Farming Expenditures
• Land clearing
• Erection of fences, yards and crushes
• Erection of farm buildings (any other like residential buildings for
farm workers is not exempt).
• Plantation costs (trees, orchards, vineyards)
• Borehole, tank and well costs (construction, improvements and
maintenance)
• Power generation expenses
• Soil erosion prevention expenses.
• Expenditure on farm roads, airstrips and bridges.
• Firebreak expenditures.
 Farming Donations
• Where a farmer donates by giving out an
animal for less than market value (General
donations), the market value of donation is
taxable.
• Where a farmer lends out livestock (Mafisa),
the value will still be part of the farmer’s
closing stock.
 Stray Livestock
• These are livestock which got lost in the tax year
and cannot be found.
• The value of these can excluded from closing
stock on the condition that;
- The livestock have been missing for a reasonably
long time period i.e. at least through out the year.
- There is sufficient evidence that all reasonable
attempts have been made to locate the livestock.
Do practice questions page 79, study text.
 Partnerships
• The taxable income of the partnership is computed just like that of a
sole proprietorship.
• The salaries and capital interests accrued to each partner from the
partnership are added to the partner’s individual chargeable income.
• The taxable income of the partnership is then apportioned to each
partner based on the agreed profit sharing ratio as stated in the
partnership deed.
• Where there is change in profit sharing ratio in the year, the
chargeable income is assumed to accrue evenly over the year
apportioned accordingly, applying the relevant ratios.

See example on page 74 – 76, study text.