By Baron Laudermilk
Botswana Minister of Finance and Development planning, Kenneth Matambo, signed a Double Taxation Avoidance Agreement (DTAA) with China on April 12 in order to foster Chinese investment in the country manufacturing and agriculture industries.
The Double Taxation Avoidance Agreement (DTAA) is designed to minimalize or remove double taxation of incomes of residents in a country who earn money in another country.
Prior to signing the agreement, Matambo said that this DTAA deal would benefit Chinese textile companies and other investors who are interested in establishing factories and businesses in Botswana. here is a notable level of trading between the two countries, said Matambo according to official reports. onetheless there is still a lot of untapped opportunities for investment especially in sectors such as manufacturing that need to be exploited. /p>
China will gain access to Botswana cheap labor, its resources, and its advantageous tax system. Matambo said after signing the deal, ur country offers a lot of advantages for investors amongst them the lowest tax rates in the region, no foreign exchange controls, and low levels of crime. /p>
The deal will reduce the burden of double taxation on Chinese investors in Botswana. Chinese outbound investment in the African nation has been increasingly rapidly in recent years; from only 1.87 million US dollars in 2007 to 43.85 in 2010. Notable Chinese investments have been made in Botswana infrastructure, textiles and agriculture, and China growing consumption of luxury jewelry is seen as vast and growing market for Botswana diamonds.
About a month ago, Botswana Ministry of Agriculture agreed on the capacity building in training programmers for experts in different agriculture industries. The ministry has invited investors to come to Botswana to set up factories and farming equipment. Botswana economy has had the highest growth rate in the world since 1966 to 1999, averaging at 9% per year. With the worldwide economic crisis in 2008, Botswana economy was affected. Botswana government wants to leverage its connections with Chinese businesses and government to stimulate its economic growth.
The Chinese Minister, Xiao Jie said that both countries have an extensive business history, and that the agreement will urther enhance the environment of trade and investment. As of now, the business relationship between China and Botswana will grow in the future, especially since Chinese investors are taxed less to do business in Botswana.
