Bridging the Gap: A Proposal to Harness Botswana's Patriotic Spirit

Economic Context: A Nation at a Crossroads

Botswana stands at a critical economic juncture. The nation experienced a 3.1% contraction in 2024, primarily due to a downturn in the global diamond market, a cornerstone of our economy. In response, the government projects a 3.3% growth in 2025, anticipating a rebound in diamond demand and diversification into other sectors. However, despite these optimistic projections, we face a substantial budget deficit, estimated at 7.56% of GDP for the 2025/26 fiscal year, a slight improvement from the previous year's 9% (Reuters).

Given these fiscal constraints—and in light of the likely tax concessions extended to De Beers in recent negotiations—it is both equitable and strategic to extend similar considerations to the broader taxpayer base through a second tax amnesty.

This initiative would not only help increase immediate revenue but also serve as a catalyst for long-term tax compliance, leveraging behavioral economics and national sentiment to activate mass participation.

Learning from the Past: Why This Amnesty Will Work Better

Botswana’s first-ever tax amnesty in 2021 provided taxpayers an opportunity to settle outstanding liabilities without incurring penalties or interest. As a first-of-its-kind initiative, participation was understandably lower, as many potential taxpayers were unfamiliar with how the process worked.

However, this initial experience created awareness and familiarity—laying the foundation for a second, more successful round. Given the increased tax literacy, clear government positioning, and improved nudging mechanisms, we can expect significantly higher participation rates this time around.

Projected Revenue Impact

Reports indicate that up to 40% of eligible taxpayers are currently non-compliant. With Botswana’s tax-to-GDP ratio at 13.6% and an estimated GDP of $18.6 billion, an amnesty encouraging just 50% of non-compliant taxpayers to regularize their status could generate up to $505.92 million (BWP ~7 billion) in immediate tax revenue.

This would significantly reduce the budget deficit while broadening the tax base for sustainable future collections.

Activating Behavioral Heuristics: Nudging the Nation Towards Compliance

Tax compliance is not just about enforcement—it’s about psychology. By using behavioral heuristics, the government can effectively nudge taxpayers into taking action. Some key psychological mechanisms that could drive participation include:

1. Bandwagon Effect (Social Proof)

• People are more likely to act if they believe "everyone else is doing it."
• How to Apply: Announce weekly participation numbers (“5,000 businesses have already applied and complied!”).

2. Loss Aversion

• People fear losing something twice as much as they value gaining something.
• How to Apply: Frame messages around what non-compliant taxpayers stand to lose if they don’t act. Example: “After this amnesty, penalties and interest be applied permanently.”

3. Authority Bias

• People are more likely to follow respected authorities.
• How to Apply: Use statements from respected business leaders, economists, and government officials supporting the amnesty. “The Minister of Finance and top economists agree—this is the best time to regularize your taxes.”

4. Mere Exposure Effect

• The more people see something, the more familiar and trustworthy it becomes.
• How to Apply: Ensure a consistent media campaign across TV, radio, and social media. Repetition will increase recognition and acceptance.

5. Present Bias

• People prioritize immediate rewards over future consequences.
• How to Apply: Offer instant incentives for early participation. Example: “Apply in the first month and get priority processing for future tax refunds.”

6. Anchoring Heuristic

• People rely on initial reference points when making decisions.
• How to Apply: Clearly state that the previous amnesty was successful, but this one is even better. Example: “In 2021, thousands benefited—now it’s your turn to take advantage.”

Advantages of a Second Tax Amnesty

1. Immediate Revenue Generation – Provides a quick cash injection into national reserves.
2. Expansion of the Tax Base – Ensures long-term compliance and future revenue.
3. Promotion of Fairness – Extends benefits to all taxpayers, mirroring corporate tax concessions.
4. Strengthening National Unity – Framing compliance as patriotic makes taxpayers feel they are contributing to the nation’s success.

Addressing Potential Concerns

Some may argue that repeated amnesties encourage tax evasion, as taxpayers assume future forgiveness. However, this risk can be mitigated by:

• Positioning the Amnesty as the Last Under this Administation – Explicitly stating no further amnesties will be granted.
• Enhancing Post-Amnesty Enforcement – Using new digital tools and AI-powered analytics to track compliance.
• Publicizing Amnesty Success Stories – To encourage compliance and build trust in the system.

Conclusion: A Patriotic Call to Action

Botswana’s new leadership has a unique opportunity to harness the nation’s goodwill and leverage behavioral psychology to drive record-breaking participation in a second tax amnesty.

By presenting compliance as an act of patriotism, using smart nudging techniques, and ensuring equitable treatment of taxpayers, Botswana can bridge the fiscal gap, strengthen its economy, and propel the nation toward high-income status.

This is not just about taxes—it’s about building a stronger, more united Botswana.

Estimated Impact: $505.92 million (BWP ~7 billion) in immediate revenue, long-term compliance boost, and increased national trust in tax governance.