"Botswana's cut-throat incentives to attract investment"

Minnow Botswana surprised by tax attack from Goliath South Africa

By Lynda Loxton and Peter Fabricius

Cape Town and Johannesburg - The Botswana government has expressed surprise that its giant neighbour, South Africa, should criticise its efforts to attract international investment from financial services companies with low corporate taxes.

It was reacting to finance minister Trevor Manuel's criticism that Botswana and Namibia had embarked on a "race to the bottom" by offering cut-throat incentives to attract investment.

This week Manuel referred specifically to Botswana's establishment of a financial services centre offering international financial services companies a tax rate of 15 percent to invest in the country - compared with South Africa's average 25 percent rate.

He said the centre violated a Southern African Development Community (SADC) agreement to converge tax rates and other economic policies. It could become a "haven for laundered money".

Alan Boshwaen, director of the International Financial Services Centre (IFSC), which Manuel criticised, said he was surprised that so senior an official would criticise Botswana's efforts to boost development and create jobs.

Full Article : busrep.co.za