13th April 2022
Sello Motseta
The Tax Amnesty was introduced because the Botswana Unified Revenue Service(BURS) established in 2004 wanted to streamline the assessment and collection of income tax, value added tax, capital transfer and customs and excise duties.
It however inherited all tax debts existing at 1st April 2004 including that could not be collected because they were liquidated companies, non-operational entities, deceased individuals and insolvent individuals. Tax Amnesties are allegedly common globally and in the region.
The Tax Amnesty approved by Cabinet in 2021, has been extended to 30th June 2022 to allow for more taxpayers to benefit from dispensation.
“Tax Amnesty is effective in recovering outstanding taxes because of the reduced penalties and interest charges. Typically, such a scheme is characterized by a blanket waiver of interest and penalties, subject to the taxpayer paying the outstanding principal tax amount during the period of the amnesty. Tax Amnesty schemes are common globally and even in our region,” said Peggy Serame, Minister of Finance and Economic Development.
She said, “We are undertaking a holistic review of the Value Added Tax Act and the Income Tax Act to ensure that this legislation anchor he efficacy of tax revenue mobilization in the modern society. The review will result in the enactment of a new Tax administration Act, as well as revised Income Tax act and VAT Act.”
Landlocked Botswana on average processes imports accounting for P 70 billion and exports worth P 60 billion annually. It involves facilitating timely importation of raw materials and machinery necessary to stimulate growth of industries in the economy creating jobs and reducing poverty.
According to officials 52% of the tax payers in arrears have applied for tax amnesty. This is quite an improvement as compared to 10% reported at 31 December 2021.
BURS is currently working on initiatives with Business Botswana and Botswana Institute of Chartered Accountants(BICA) to encourage their members to apply for Amnesty.
77% of Government revenue and grants comes from BURS. In the current financial year 2022/23 BURS is expected to collect P46.33billion(which is 68% of the P67.87billion revenue needed for financing Government projects and programmes.
The new BURS leadership has identified a number of priorities such as addressing problem of tax evasion and increasing awareness amongst stakeholders of importance of paying taxes that have translated into a roadmap that will guide a prograamme of implementation.
Jeanette Makgolo, Commissioner General for Botswana Unified Revenue Service(BURS), said “Top of my agenda was to address ICT systems related challenges. BURS has embarked on a journey to modernize its ICT infrastructure with a view to enhancing, in the main, taxpayer compliance.”
She said, “Amongst other things we have considered to realign our organizational structure to ensure that we deliver on our core mandate which is the effective collection of all taxes. At a bare minimum the structure should ensure that critical functions of aa revenue agency such as taxpayer service, audit, debt management and investigations are prioritized and put in place as they are the core pillars of our mandate.”
A process to enhance security has also commenced after gaps emerged in protection of information for people as well as enhance customer satisfaction. The human resource function have also been digitized as it relates to leave applications for employees and online assessment process.
