What is Import VAT

 Import Value Added Tax (VAT) is a consumption tax imposed on goods brought into a country from abroad. For registered businesses, import VAT is usually recoverable, provided the goods are used for taxable business activities. Understanding the reclaim process helps businesses improve cash flow and maintain compliance with tax regulations.

Who Can Reclaim Import VAT

 1. VAT‑Registered Businesses (Vendors)

Businesses registered for VAT in Botswana can claim input tax on import VAT, but only after the VAT has been paid.

• This applies when goods are imported for use in making taxable supplies.

 2. Importers Who Carry Out a Taxable Activity

Any person or entity engaged in a taxable activity that is VAT‑registered (businesses, partnerships, trusts, companies, state entities, etc.) is eligible to claim input VAT on imports used in that activity.

• Botswana’s VAT system allows input VAT claims for taxable activities registered with BURS.

 3. Mixed‑Supply Businesses (Taxable + Exempt Supplies)

Such businesses can claim import VAT only for goods/services used to make taxable supplies, not exempt ones.

• Only claim for taxable claim for taxable supplies
• If goods/services are used for exempt supplies, input VAT cannot be claimed.

4 . Special Category: Diplomatic Missions

Diplomatic missions, international organisations, and certain exempt persons can obtain VAT refunds on qualifying imports.

• They are legally entitled to VAT relief under Botswana’s VAT Act and diplomatic immunity laws.
• Refunds are processed quarterly through the Ministry of International Affairs & Cooperation.

For the above to claim the Import Vat below are required

•          The claimant must be VAT registered.

•          Imported goods must be used in the business for taxable supplies.

•          Proper documentation must be available.

•          The import entry must reflect the business as the importer of record.

NB: Non‑Registered Persons Cannot Claim Import VAT

If you are not registered for VAT, you cannot claim input VAT on imports.

• Non‑registered or exempt-supply-only businesses are treated as the final consumer and therefore bear the VAT cost.

Conditions of VAT Reclaim

Businesses can reclaim VAT if:

•          VAT was correctly charged on the import.

•          Goods are intended for business use.

•          The business holds valid import documentation (e.g., customs entry forms).

•          The VAT claim is submitted within the statutory period.

 STEP BY STEP PROCESS OF RECLAIMING IMPORT VAT

Step 1: Ensure VAT Registration

A business must hold a valid VAT registration number before submitting claims.

Step 2: Verify Customs Entry Records

Confirm:

•          The business name matches the importer/consignee’s name.

•          VAT was correctly calculated.

•          The correct tariff codes were used.

Step 3: Gather Required Documentation

Collect original or certified copies of import documents (listed below).

Step 4: Record the VAT Amount in VAT Returns

Import VAT is typically claimed in the VAT return period during which:

•          The import occurred, AND

•          Documentation is available.

Step 5: Submit Return and Retain Records

Submit the return electronically and keep all records in case of an audit.

Documentation required to reclaim Import VAT

Common documents include:

•          Customs entry form (e.g., SAD 500/SAD 501 or national equivalent)

•          Bill of Entry

•          Commercial invoice from the supplier

•          Proof of payment for the goods

•          Tax invoice from clearing agent showing import VAT

•          Receipt issued by customs confirming VAT payment

•          Import permit (if applicable)

•          Purchase order/contract (optional, but useful for audit

Common challenges & how to avoid them

Frequent issues:

•          Mismatched importer name (business can’t claim VAT)

•          Missing customs documents

•          Attempting to claim VAT on zero rated or exempt goods

•          Late claims outside the permissible time window

Solutions:

•          Use a reputable clearing agent

•          Keep digital copies of all import documentation

•          Conduct periodic internal audits

•          Train staff handling imports

Conclusion

Reclaiming import VAT is a straightforward process when businesses maintain proper documentation and understand the requirements. With correct procedures in place, organizations can protect their cash flow, avoid compliance issues, and take full advantage of VAT recovery mechanisms.