Africa-Press – Botswana. About 60 per cent of the 268 781 companies that were registered by CIPA since 2012 have been de-registered.
Minister of Trade and Industry, Mr Mmusi Kgafela said CIPA did not classify the registered companies according to the sector in which they intended to operate during registration.
He said at the point of registration companies were not classified by owner citizenship and that identifying locally owned companies was based on the submission of Omang for directors.
He noted that such information was collected by licensing authorities at councils and the ministry manually, therefore taking time to compile.
However, Mr Kgafela said efforts were being made to automate the process. He said CIPA was unable to provide statistics on the percentage of citizen and non-citizens per sector for the de-registered companies.
He noted that some of the companies were voluntarily de-registered by the owners and that some for non-compliance to annual returns as well as failing to comply with the Re-registration Act.
Mr Kgafela said experience had taught them that even companies that were fully operating and profitable were failing to file their annual returns, and that it was not true that only those not operating were non-compliant.
Additionally, Mr Kgafela said annual returns were meant to show that a company was not dormant.
He also noted that annual returns statistics were used by the Financial Action Task Force (FATF) and the Eastern Southern African Anti Money Laundering Group (ESAAMLG) and the Global Forum for Exchange of Information for Tax Purposes to monitor compliance of registered companies.
He said compliance with annual returns mitigated risks associated with the use of shelf, shell and dormant companies, which if not monitored, may pose a high risk of money laundering and financing of terrorism.
Mr Kgafela said lack of adherence would contribute to the downgrading of the recommendations or immediate outcomes that CIPA was responsible for and had an impact on the overall performance of the country.
The minister also said lack of adherence to the standard may contribute towards getting Botswana back to grey listing and enhanced monitoring by the AML/CFT bodies.
In relation to measures outside CEDA funding geared towards the survival rate of citizen companies in order to measure sustainable economic empowerment, Minister Kgafela said CEDA has adopted two distinct approaches to gauge sustainability of such enterprises.
He said the ‘green fields’ survival rate tool was used to measure the number of start-up expanding businesses in operation for more than three years or the total number of assisted business older than three years.
Regarding the ‘brown fields’ survival rate, Mr Kgafela said the toll was used to measure the number of expanding businesses in operation for more than three years or the total number of assisted businesses older than three years. He highlighted that as at the end of June, the survival rate for green field or start up projects was 88.6 per cent against a target of 86 per cent while brown fields were 91.6 per cent against a target of 81 per cent.
MP for Lobatse, Dr Thapelo Matsheka had asked the minister to share the impact of the Citizen Empowerment Policy of 2012, stating the percentage share of citizens and non-citizen businesses per sector as defined by Statistics Botswana from 2012 to 2021 as well as the number of companies that had been registered by CIPA or the registrar of companies since 2012.
Dr Matsheka also wanted to know the percentage of companies that had been de-registered by CIPA both citizen and non-citizen per sectors and the reasons for de-listing.
He also wanted to know if the minister had any measures outsideCEDA funding for the survival rates of citizen companies to measure sustainable economic development.
He also asked if the minister did not consider failure to submit returns as an indication of lack of access to opportunities by citizen companies or the lack of trading other than lack of compliance, and if the minister would consider scrapping the fee on submitting returns to allow for such companies to keep trying to access the market reserved for citizen companies as that was a cost to doing business.
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