19 Dec 2021

Government has resolved to extend the tax amnesty scheme by a further six months from December 2021 to June 2022 to allow more taxpayers to benefit from the dispensation.

Minister of Finance and Economic Development, Ms Peggy Serame, who was making a statement in Parliament on Thursday,  said considering the high volume of requests for waiver of interests and penalties that were submitted by taxpayers to the Ministry of Finance and Economic Development, government had decided to implement the tax amnesty scheme aimed at giving tax payers an opportunity to normalise their tax status by paying off their outstanding principal tax in return for cancellation of interests and penalties.

She said the tax amnesty scheme formed part of the ministry’s efforts to encourage taxpayers with overwhelming and unmanageable tax arrears to clear their liabilities and to start from a clean slate in terms of their tax obligations.

The minister said the scheme was intended to ease the burden on all taxpayers and that it offered a limited time incentive for the affected taxpayers to put their tax affairs in order.

This, she said, would go a long way in facilitating local businesses to get their tax clearance certificates from Botswana Unified Revenue Services (BURS) in order to be able to participate in the wider economy.

Ms Serame stated that the scheme targeted 22 839 taxpayers with income tax and Value Added Tax (VAT) arrears amounting to approximately P6.8 billion.

The arrears, she said, comprised of principal tax of P2.5 billion, interest of P3.5 billion and penalties of P800 million.

Nonetheless, despite efforts by BURS to encourage taxpayers to take advantage of the scheme, uptake of the scheme had been low as by end of November only 3 377 taxpayers out of 22 839 in arrears had applied for the tax amnesty scheme.

She said in terms of collection, a total of principal tax of P64 million was paid, with total written off or pardoned interests and penalties standing at P95.6 million.

Minister Serame noted that COVID-19  continued to impact on many tax payers’ businesses.

To this end, BURS has been inundated with pleas from bodies representing taxpayers such as Botswana Institute of Chartered Accountants (BICA), Business Botswana and individual taxpayers to extend the amnesty period, she added.

She said the plea for extension was based on the fact that a substantial number of taxpayers had the desire to take advantage of the scheme, but were constrained to pay their principal tax liabilities within the time remaining due to cash flow challenges occasioned by limited business as a result of the COVID-19 pandemic.

She further explained that BURS had also received appeals for payment plans that would stretch beyond the December 31 deadline from many taxpayers with significant tax liabilities.

The minister noted that data reconciliation at BURS was another challenge as a result of migration of data to the current tax administration system which was launched in May last year. She added that to mitigate against the situation, the organisation had engaged 95 temporary employees to expedite the reconciliation of taxpayer accounts by the end of December.

She said more time was therefore necessary to allow taxpayers after reconciliation of their accounts to enjoy the scheme.

She said an extension of the scheme would create an opportunity for BURS to engage with more taxpayers and update their taxpayer information.

She stated further that the ministry, through BURS, was committed to undertake several initiatives to improve the uptake of the scheme. ENDS