03 Mar 2013

The ministry of Finance and Development Planning has never conducted any study to determine how much revenue the country could have lost as a result of capital flight.

Responding to a question in Parliament on Wednesday, Assistant Minister of Finance and Development Planning, Mr Vincent Seretse said there were no plans to conduct a study since there were agreements with major trade partners such as Zimbabwe, South Africa and Namibia as well as other countries in the Southern African Development (SADC) region.

Mr Seretse said agreements such as Double Taxation Avoidance and Tax Information Exchange provided for exchange of information which may be used to address concerns of capital flight from Botswana, if such concerns arose.

“We are aware that there are times when attempts are made to misinvoice, or under–declare goods and services imported into or exported out of Botswana,”he said.

Parliament heard that the Botswana Unified Revenue Services, (BURS) regularly checked declared current values of goods and services against values of similar or identical commodities that might have been imported or exported in the past as a way of detecting and preventing misinvoicing.

Where acts of deliberate misinvoicing or under – declaration were detected, Mr Seretse said ,appropriate penalties were imposed since BURS had the legal capacity to intervene in such circumstances.

Further, Mr Seretse said his ministry regularly engaged with the private sector to sensitise them about the negative impact on the economy of declaring incorrect values of imported and exported goods and services.

The assistant minister was responding to a question from MP for Tonota North, Mr Fidelis Molao who had asked him whether his ministry had ever conducted a study to determine how much revenue the country could have lost in the past 10 years as a result of capital flight especially in the mineral sector.

He also wanted to know the results of such a study and if it was never conducted he wanted to know when the ministry would institute it.

MP Molao had also asked if  trade misinvoicing did not occur in Botswana and the mechanisms put in place to detect it and prevent it from happening. ENDS