07 Aug 2015

Some Members of Parliament are uncomfortable with an Income Tax (Amendment) Bill clause,  which proposes that Botswana Meat Commission (BMC) be exempted from paying tax.

The bill, which was debated under a certificate of urgency, was meant to amend the Income Tax Act to simplify the law relating to taxation as well as tax administration.

Debating the bill, Gabane-Mankgodi MP, Maj. Gen. Pius Mokgware said he was uncomfortable with clauses 2, 9, 12 and 14 of the bill, that provided for the exemption of BMC from tax and treating all income from cattle like any other income for tax purposes and substituting for definition of farm operations.

Maj. Gen. Mokgware argued that it would be unfair on the farmers’ side to be taxed while BMC would not be paying tax.

He said to make Batswana pay tax after selling cattle was punishment and would make them poor.Furthermore, he said BMC was already exploiting Batswana as the commission bought cattle at low prices.

He suggested that the Minister of Finance and Development Planning should have at least set a certain number of cattle sold that a farmer could be taxed from. He added that he anticipated more problems for Batswana should the bill be passed.He noted that Batswana were not well versed with tax issues, and that the level of education about tax in the country was not satisfactory.

On the other hand, Gaborone Bonnington South MP, Mr Ndaba Gaolathe also did not support the proposal to exempt BMC from taxation, saying he did not think any major business should be exempted from tax.

Mr Ndaba added that it was conceivable that the country could restructure its beef industry, and that  BMC could have competitors which the country would not want to exempt from paying tax.

He also said it did not necessarily mean that when a business had its tax rates reduced would translate into benefits. He also added that exemption of the commission from taxation would not be viable. He suggested that BMC should continue paying tax as part of discipline in their core structure so that when the time came for them to compete with other businesses, they would be able to do so.

As for taxation of farmers, Mr Ndaba said many Batswana were pastoral farmers, hence the finance minister needed to find a definitive threshold below which there would be no need for any form of tax. Ends