15 Feb 2015

Government is losing about P10 billion every year though corruption and tax evasion by companies doing business in Botswana, Gaborone North MP Mr Haskins Nkaigwa has claimed.

Debating the Ministry of Finance Development Planning’s budget proposals for 2015/16 financial year, he said he read a report which indicated that tax evasion was a serious problem for Botswana.

He said the report produced by an organisation based in the United States of America indicated that tax evasion and corruption cost Botswana lost revenue amounting to around P10 billion annually. He asked government to device ways of addressing this problem to avoid a situation whereby a lot of revenue is lost to the economy.

“When we complain that government has shortage of funds, this is the issue that we should be tackling seriously,” said the Umbrella for Democratic Change legislator.

Mr Nkaigwa also asked the finance ministry to capacitate Botswana Unified Revenue Services (BURS) so that it is able to bust companies that evade tax. The MP said some companies evade tax through the use of numerous bank accounts to hide profits.

Thus, they end up not paying the correct amount of tax they should be paying because they hide profits. Mr Nkaigwa also asked the ministry to consider opening BURS satellite offices in district councils to reduce distance travelled by Batswana to pay tax.He also said government should remove tax from important commodities such as health services, electricity and water.

Molepolole North MP, Mr Mohammed Khan added to the topic by urging government to tighten controls to reduce tax evasion at border posts. He alleged that some businesses that import goods into Botswana cheat the customs offices by altering prices when they cross the borders into Botswana.

Therefore, they end up being charged less customs duty tax, which leads to government losing a lot of revenue.The legislator also asked government to revamp its taxation and levy collection system, which he said is not effective. He cited the plastic levy as an example, saying it is not clear how government has collected it from businesses since it was introduced.

Palapye legislator, Mr Moiseraela Goya, who criticised MPs for their failure to debate the Budget Speech in large numbers last week, said he was happy that government was considering commercialising the National Development Bank (NDB).

He said the move taken by government was good, but cautioned that when it goes commercial, NDB must offer services different from existing banks so that its commercialisation can benefit the nation.He also said it must operate in places where existing banks have not yet arrived.

Gaborone Bonnington South MP, Mr Ndaba Gaolathe said professionals within the ministry of finance deserve credit for professionalism they exhibit in handling the economy. 

Addressing the issue of privatisation, he said government should have clear objectives of what it wants to do with public sector enterprises (parastatals).He said instead of completely putting public sector enterprises on private hands, government should use them to catapult the economy.

He suggested that government should consider turning some of the public sector enterprises into multi-national companies which government can use for investment and economic diversification.

“Reengineering should be informed by what we want to achieve with these public sector enterprise. We need to significantly increase our capacity as government system to improve public private partnerships,” Mr Gaolathe said. ENDS