{"id":9780,"date":"2022-07-06T14:44:50","date_gmt":"2022-07-06T14:44:50","guid":{"rendered":"https:\/\/www.africa-press.net\/botswana\/all-news\/burs-search-for-missing-tax-billions-starts-with-booze-industry"},"modified":"2022-07-06T15:57:40","modified_gmt":"2022-07-06T15:57:40","slug":"burs-search-for-missing-tax-billions-starts-with-booze-industry","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/botswana\/all-news\/burs-search-for-missing-tax-billions-starts-with-booze-industry","title":{"rendered":"BURS\u2019 search for missing tax billions starts with booze industry"},"content":{"rendered":"

Africa-Press – Botswana. <\/strong><\/span>The taxman plans to institute a controversial \u201ctrack and trace\u201d system for the alcohol and tobacco industry this year, a sector it says is among those responsible for the loss of up to P3 billion every year in unpaid taxes. The system\u2019s introduction ends after a six-year battle that went all the way to the Finance Ministry, reports Staff Writer, MBONGENI MGUNI<\/b><\/p>\n

Experts at the Botswana Unified Revenue Service (BURS) believe that if every taxpayer in the country paid their dues, there would either have been no need for the shock tax increases last year or at least the levels of the increments would have been lower.<\/p>\n

Instead, a highly revealing tax gap analysis by the agency has found that up to 60 percent, or nearly two in three taxpayers are dodging their obligations, meaning a higher burden on those who actually pay their dues.<\/p>\n

With a target of collecting P46.4 billion in taxes this year, representing about 70% of government budget revenues, and with little room left to increase tax rates on those who are compliant, the BURS says it is stepping up its efforts to collect every last drop due to the treasury.<\/p>\n

One of these efforts involve instituting the \u201ctrack and trace\u201d initiative for the alcohol and tobacco industry, which BURS has identified as one of the sectors where tax revenues are slipping through the agency\u2019s fingers.<\/p>\n

The trouble, the tax agency says, is that the industry, particularly in alcohol, has a high number of taxes, levies and other statutory revenues due to government, which makes under-reporting and understatement rampant.<\/p>\n

Track and trace is the key to ensuring the industry is actually paying all of these obligations over, the taxman says.<\/p>\n

\u201cThis is a solution that places a biometric imprint on products as they are manufactured, just like in the case of the national currency, which makes them traceable and easy for verification,\u201d BURS\u2019 operations commissioner, Phodiso Valashia told Mmegi during a briefing this week.<\/p>\n

\u201cAt that point, the BURS would have all the information about how the product was made, what tax was paid or not and other data with the intention being to deal with issues such as making sure the correct revenue is collected because there\u2019s a lot of understatement and non-declaration in this industry.<\/p>\n

\u201cWe have been seeing trucks coming in with alcohol or cigarettes undeclared but with this type of information on every single product in the economy, we can check at any point if the product is legitimate.<\/p>\n

\u201cIt\u2019s also an issue of fairness in the market because some cannot be paying tax, while others are enjoying their profits.\u201d<\/p>\n

The track and trace system is not new. The initiative has been on the cards since at least 2016 and has been strongly resisted by the alcohol and tobacco industry, with the key contention being the cost of the biometric marker and who should bear the cost.<\/p>\n

For the alcohol industry, players such as Kgalagadi Breweries Limited, the country\u2019s biggest producer, view the biometric imprint or stamp as useful but an additional \u201ctax\u201d on their operating costs, which since 2008 have been squeezed by the alcohol levy.<\/p>\n

The Botswana Alcohol Industry Association has in the past said the track and trace system, at the level of costs per stamp proposed by the BURS, would have disrupted the industry to the \u201cpoint of closure\u201d. The BURS intended to introduce the stamp in 2017 at a cost of 30 thebe per stamp, with producers also required to set up machines to do the imprint. For producers such as KBL who pump out millions of units per year, the costs would have been significant.<\/p>\n

The Association argued that up to 98% of local alcohol trade was easily traceable and the battle was escalated to the Finance Ministry where it appeared to have been put on the back shelf.<\/p>\n

This week, Valashia said the time for talk had ended and the track and trace was going ahead.<\/p>\n

\u201cWe have been consulting the alcohol and tobacco industry since 2016 and we have agreed on certain things and disagreed on others,\u201d he told Mmegi.<\/p>\n

\u201cWe have not agreed on the cost because the industry wanted the stamp at certain thebes and we offered it at a certain amount.<\/p>\n

\u201cIt\u2019s still a disagreement but we want to believe that with such a solution, it must be self-liquidating because it is not us running this, but outsourcing it to them.<\/p>\n

\u201cThe industry said we should leave the compliance solution to them as the private sector and they even said so last week.<\/p>\n

\u201cWe had given them from 2016 to understand the landscape in terms of smuggling and under-reporting, but that has not changed and that\u2019s why we have said in this financial year, having given them those years to come up with a solution, it is time for BURS to bring its solution.\u201d<\/p>\n

Besides the alcohol and tobacco sector, the BURS is also setting its gunsights on other players in the economy, in search of the billions of Pula bypassing the fiscus. According to Valashia, these missing billions are spread across different industries, taxpayer types and tax types. For Value Added Tax, which this year is expected to reach P12 billion or a quarter of total collections, the BURS is going digital.<\/p>\n

\u201cIn this financial year, we are planning to introduce VAT electronic billion solutions and we have actually gone out to benchmark with other countries of comparable status,\u201d Valashia said.<\/p>\n

\u201cWe believe something like that can go into the formal and informal sector and has the potential to help close the tax gap that currently obtains.\u201d<\/p>\n

For Pay as You Earn tax, the BURS plans to heighten awareness on the need to file returns, as the tax year begins in July. This year, the agency plans to conduct a national launch for the filing season on July 5 in Francistown and step up its educational campaigns on the Internet and social media.<\/p>\n

Together with stronger auditing and the digitisation of its collection and payment methods, the BURS hopes to close the tax gap and ensure more taxpayers are actually contributing their part.<\/p>\n

\u201cPeople must realise that this economy is in their hands and no one is going to finance us from outside,\u201d Segolo Lekau, BURS commissioner customs, told Mmegi.<\/p>\n

\u201cIf we need to pay for roads, hospitals and others, who is going to help?<\/p>\n

\u201cWe have to do the right thing and if we collect from everyone, then the revenue shortfalls would not hit us that hard.<\/p>\n

\u201cLet\u2019s all pay so that we can take these services such as electricity, water and roads, to the people.\u201d<\/p>\n

For More News And Analysis About Botswana<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Botswana. The taxman plans to institute a controversial \u201ctrack and trace\u201d system for the alcohol and tobacco industry this year, a sector it says is among those responsible for the loss of up to P3 billion every year in unpaid taxes. The system\u2019s introduction ends after a six-year battle that went all the […]<\/p>\n","protected":false},"author":84,"featured_media":9779,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,6,8,16],"tags":[233,237,234],"class_list":["post-9780","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-files","category-homepage-english","category-twitter","tag-africa-press","tag-africa-press-botswana","tag-botswana"],"yoast_head":"\nBURS\u2019 search for missing tax billions starts with booze industry - Botswana<\/title>\n<meta name=\"description\" content=\"The taxman plans to institute a controversial \u201ctrack and trace\u201d system for the alcohol and tobacco industry this year ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/botswana\/all-news\/burs-search-for-missing-tax-billions-starts-with-booze-industry\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"BURS\u2019 search for missing tax billions starts with booze industry\" \/>\n<meta property=\"og:description\" content=\"The taxman plans to institute a controversial \u201ctrack and trace\u201d system for the alcohol and tobacco industry this year ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/botswana\/all-news\/burs-search-for-missing-tax-billions-starts-with-booze-industry\" \/>\n<meta property=\"og:site_name\" content=\"Botswana\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2022-07-06T14:44:50+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-07-06T15:57:40+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/botswana\/sites\/38\/2022\/07\/postQueueImg_9-62c5b0dec0e3d.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"532\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"6 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/botswana\/all-news\/burs-search-for-missing-tax-billions-starts-with-booze-industry#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/botswana\/all-news\/burs-search-for-missing-tax-billions-starts-with-booze-industry\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/botswana\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"BURS\u2019 search for missing tax billions starts with booze industry\",\"datePublished\":\"2022-07-06T14:44:50+00:00\",\"dateModified\":\"2022-07-06T15:57:40+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/botswana\/all-news\/burs-search-for-missing-tax-billions-starts-with-booze-industry\"},\"wordCount\":1127,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/botswana\/all-news\/burs-search-for-missing-tax-billions-starts-with-booze-industry#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/botswana\/sites\/38\/2022\/07\/postQueueImg_9-62c5b0dec0e3d.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-Botswana\",\"Botswana\"],\"articleSection\":[\"all news\",\"files\",\"homepage-english\",\"twitter\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/botswana\/all-news\/burs-search-for-missing-tax-billions-starts-with-booze-industry#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/botswana\/all-news\/burs-search-for-missing-tax-billions-starts-with-booze-industry\",\"url\":\"https:\/\/www.africa-press.net\/botswana\/all-news\/burs-search-for-missing-tax-billions-starts-with-booze-industry\",\"name\":\"BURS\u2019 search for missing tax billions starts with booze industry - 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