Botswana belongs to a customs union called the Southern African Customs Union (SACU), with South Africa, Lesotho, Swaziland, and Namibia. South Africa levies and collects most of the customs, sales, and excise duties for the five member states, paying a share of the revenues to the other four. In addition, all customs duties are eliminated among the five countries. The SACU implements high protectionist tariffs on countries outside of the club, though, disheartening potential nonmember investors. In 1996, the Southern African Development Community (SADC) launched a free trade agreement for the elimination of tariff and non-tariff trade barriers between its member countries (Angola, Democratic Republic of the Congo, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Zambia, and Zimbabwe), to be completed by 2010.
South Africa has put in place a value-added tax (VAT) for imports coming into the SACU from outside, but its implementation on Botswana's borders has so far been unsuccessful. Additionally, as a signatory of GATT and a member of the World Trade Organization, Botswana and the rest of the SACU will have to reduce tariffs by 24% over the course of 10 years.