Mrs Ame Rebecca Masuku will present a paper titled - The emergence of a special tax zone in Botswana’s legal framework: a critique of the Botswana SPEDU Region under BEPS Action 5
Special Tax Zones (STZs) are areas within a jurisdiction where tax regulations are more beneficial that the ones generally applicable in the surrounding country. STZs are subsets or a special type of Special Economic Zones (SEZs). This is because the preferential treatment given in SEZs is wider and encompasses more than just tax benefits.
The Botswana SEZ Policy of 2010 together with the Botswana SEZ Act of 2015 provide the legal framework under which SEZs are established, developed and managed in Botswana. Since STZs are a subset of SEZs, it is submitted that the same legal framework extends to the establishment, development and management of STZs. the Selibe Phikwe Economic Diversification Unit (SPEDU) has been tasked with attracting investment and general economic regeneration to the SPEDU Region which is in dire need of sound investors that can setup enterprises and hire people. Since the collapse of the BCL mine in Selibe Phikwe this mandate has required implementation at an accelerated rate. This paper posits that the Development Approval Orders given with respect to the SPEDU Region effectively makes the SPEDU Region an STZ.
The Base Erosion and Profit Shifting (BEPS) Project speaks to companies engaging in aggressive tax planning strategies that exploit loopholes in tax systems to make profits ‘disappear’ or shift them to tax jurisdictions with little or no overall corporate tax. On 5 October 2015, the Organisation for Economic Co-operation and Development (OECD) released final reports on all 15 focus areas in its Action Plan on BEPS. These Actions target various formations, computations and permutations that could potentially give rise to BEPS. BEPS Action 5 is entitled “Countering Harmful Tax Practices More Effectively Taking into Account Transparency and Substance. This paper examines whether the SPEDU Region as an STZ doesn’t create an avenue for potential investors to undertake harmful tax practices as envisioned under BEPS Action 5.
Contact Khumalo at +267 355 2335