16 Dec 2021

There is a need for government to review the abolished capital controls, says Selibe Phikwe West MP, Mr Dithapelo Keorapetse.

Contributing to the debate on the economic recovery support programme, African Development Bank (AfDB)) Loan Authorisation Bill,in Parliament Mr Keorapetse said the abolishing of capital controls in 1999 allowed the repatriation of all profits by foreign investors.

He said government was losing out on revenue collection by allowing big foreign companies to repatriate all of their profits after doing business in Botswana. He argued that there should be legislation that would compel investment of a certain percentage of such profits in Botswana.

To attract more investors, he said the country also offered investment incentives to foreign companies, citing exemption from VAT and capital gains tax and a discounted corporate tax.

Such incentives, he said, made no economic sense and did not contribute to the government revenue collection.

Mr Keorapetse also said government revenue collection was low, adding that the country’s tax to GDP ratio, which was 12.1 per cent in 2018 according to the Africa Revenue Statistics, pointed to a monumental failure to collect revenue on the part of government.

He challenged Botswana Unified Revenue Services to at least collect 30 per cent of the revenue in order to finance the implementation of National Development Plan 12.

He also pleaded with government to implement the necessary economic and other structural reforms in order to build resilience through economic diversification and inclusive growth.

Value chain beneficiation, he said, would create more jobs which would in the long term translate to more tax revenue.

He noted that it would cushion government from having to apply for loans to finance budget deficits.

He also said it was important for government to invest pension funds locally and to finance high value projects that would generate high dividends.

Mr Keorapetse further indicated the need to improve revenue collection of the aviation industry. He said small aircrafts should be permitted to utilise underutilised airports like those in Selibe Phikwe and Ghanzi.

He said parking and landing fees should be reduced as well as passage navigation fees on small aircrafts in order to lure more small private aircrafts in the market.

Contributing to the debate ,Ramotswa MP, Mr Lefoko Moagi supported the application. He also said there was need to improve revenue collection at the local authority level.

He said it was important for councils to be efficient in their collection of rates levies as well as to review their cost recovery measures that could contribute towards sustainable revenue generating streams.

Mr Moagi expressed optimism that government would, through the approved loan, provide a conducive environment for economic growth that required adequate infrastructure and provided better connectivity while enhancing productivity and efficiency.

He stated that government was committed to investing on the development of key economic enabler projects that would support growth such as transportation and logistics.

He said infrastructure and utilities such as electricity, water supply, telecommunication services and sewerage systems were essential towards creating a conducive economic environment that would benefit the country. ENDS