Botswana Trade Commission

Tariff Amendments

Tariffs are meant to protect and ensure competitiveness of SACU industries. There are three (3) types of tariff amendments: Decrease in the rate of customs duty (tariffs); Increase in the rate of customs duty; and Creation of rebate and drawback provisions.

Tariffs are taxes or customs duties imposed on imports or exports of goods. The types of duty may include:

  • Ad valorem duties - E.g. 10% of P2,000

  • Specific duties - E.g. P10/kg

  • Mixed duties - E.g. Max(10% or P10/kg)

  • Compound duties - E.g. 10% and P10/kg

Botswana being a member of the Southern African Customs Union (SACU) implements a Common External Tariff (CET) i.e. charges the same level of duty as the other countries of the Customs Union.

The main objective of tariff amendments is to protect and assist the SACU industries to be globally competitive. This is informed by an investigation which is done by gathering as much information as possible on the affected industries and the relevant stakeholders. There are three (3) types of tariff amendments, namely, decrease in the rate of customs duty; increase in the rate of customs duty; and creation of rebates/duty drawbacks.

Decrease in the Customs Duty

An investigation on a reduction in the customs duty is conducted when there is no SACU industry that is producing the product(s) in question. The reduction could lead to immediate reduction to zero or a gradual phase-down. This reduces the cost of products that are imported hence contributing to fair prices.

A reduction or removal of duty is usually considered where a product attracting duty is used in the production processes of an industry and is:

  • raw materials input;

  • intermediate goods inputs e.g. buttons; or

  • capital goods (machinery).

Increase in the Customs Duty

Industry may apply for an increase in a customs duty when there is a SACU industry that is producing the product(s) in question. An increase in customs duty is considered where a domestic industry is experiencing import penetration that threatens its survival. This mainly is to enable the existing SACU industry to compete with imported products.

Creation of Rebates/Duty Drawback

Rebates and drawbacks are created on products that attract duties but are not available or are insufficiently produced in SACU and this reduces the cost of manufacturing. This promotes the manufacturing activities in SACU. Rebates and drawbacks form a key pillar of certain industries development programmes, such as those for motor vehicles and clothing and textiles.

  • Rebates – exemptions provided for domestic industries not to pay customs duties at the time of importation.

  • Duty drawbacks – operators pay customs duty then claim duty after exportation (for exports only).

Industry may apply for a rebate or refund of the duties payable on inputs used for manufacture of goods destined for the export market. The rebate or refund of the duty on inputs for export purposes is an incentive for allowing manufacturers to source their intermediate materials and component inputs at world prices.

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