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Govt overwhelmed by too many levies

DISCUSSION: BB CEO, Machailo Ellis and her President Mr Mosienyane.

Business Botswana (formerly Botswana Confederation of Commerce, Industry and Manpower (BOCCIM), wants the employment of some of the country’s many levies to be interrogated as they are seemingly compromising the efficiency of tax collection and good governance.


In its final draft report on the impact of commercial levies on businesses, BOCCIM reveals that with the many levies collected in the country, accountability has become an issue as Parliamentary oversight is lacking in respect of the collection and use of a lot of the revenues raised through levies.


“That certain of the levies do not go through the Consolidated Fund and therefore, are not subjected to the oversight of the Ministry of Finance and Development Planning has to be a worry. This is more so considering that no evidence exists to the effect that the Government agency, which has the mandate of collecting taxes, that is, Botswana Unified Revenue Services (BURS) is incapable of doing its work properly.”


It is the view of BOCCIM that allowing entities like the Gambling Authority to collect levies is inefficient because their competence regarding the comprehensiveness of systems management and optimising collections has not been proven.


“The collection of levies by some authorities other than constitutionally provided service, BURS, only serves to compromise the efficiency of the national revenue collection system. For instance, the environmental levy on shopping plastic bags stood uncollected by the appropriate authority for many years. Where some authorities collect, such as in the case of the Casino levy, it is doubtful as to whether the Casino control Board/ Gambling authority has the competence to optimise the intended revenue collection,” the report reads in part.


The contention by BOCCIM was that certain entities are in the habit of collecting levies and upholding funds in excess of what they require for their regulatory of or other such operations. In BOCCIM’s view, the surpluses are evidence that the levies are too high and that having these funds sitting outside the Consolidated Fund cannot be in line with good governance.


“It is desirable to account for all levies in a manner that would be recommendable by constitutional or approved public accounting offices such as that of the Auditor General and Accountant General. Actual practice has been determined to be a challenge or alternatively proven opaque and not consistent with the best practice,” the report further reads.


BOCCIM’s position on levies is that the plurality of levies raises the costs of doing businesses and therefore undermines competitiveness of firms in general. Based on this perspective it is the opinion of BOCCIM that any proven detrimental effect of levies be removed.


“What should be of concern all the time is to be able to review and discard what does not work as intended or what is inconsistent with good practice as supported by empirical evidence,” the reports pointed out.


Some of the levies that are perceived by the business community to be problematic include that of the UHT milk, wheat flour, alcohol, road safety, tourism training and BOTA training levies.


“To the extent that levies such as the one collected by BOTA mainly come from and are meant to aid the private sector’s development, there exists a valid question regarding whether the desired utility is being achieved. A further question is, whether the private sector is being adequately consulted on the utilization and otherwise of funds that pile, and remain unused. So the principle of equitable or recovery is an issue for consideration regarding what was intended and what is happening,” the report further pointed out.


BOCCIM therefore is recommending that a review and analytical work be undertaken by government to establish whether the use of levies and special funds should not be rationalised. Part of the review according to them should be to determine whether the households are in fact benefiting from levies and whether some of the levies are not unduly protective to a few corporate beings, at the cost of introducing anti-competitive tendencies.


“From the over-arching and good governance perspective, it cannot be sustainably argued against the following observation that, the issue of a plethora of “off-budget” levies and special funds undermines good and accountable governance when considering the authority and oversight of Parliament regarding public finances.”


However BOCCIM does acknowledge that there are certain levies that have possible long term justification such as the Road levy and the National Electrification Special Fund. Nonetheless, to the extent that these are taxes, it suggests that, for all intents and purposes, they must go through the designated and unified national revenue process and be accounted for through Parliament.


“It should be for the Parliament to sanction the collection and utilisation of these funds. That is how the efficacy and public financing system can be improved without compromising tax collection,” the reports added.


Renowned economists, Keith Jefferies and Bogolo Kenewendo, Thabelo Nemaorani, noted in a report that as at 2013, there were 37 special funds in existence, 19 of which are financed through levies that the government imposes on different activities.


During the fiscal year 2012/13, the different levies generated over P995 million in revenue, with the largest contributors being the National Electrification levy (P232 million), the Vocational training levy (VTF) (P215 million), the road collections levy (P210 million) and lastly the Alcohol levy (P162 million).


“Since the levies do not go through the normal budgetary process and legislative scrutiny, they compromise tax efficiency and transparency. Some stakeholders argue that the funds collected from the levies are utilised without fully involving those who contribute, such as the private sector, and as a result, channels of accountability have become blurred. The lax tax system and lack of transparency also provides an opportunity for exploitation,” the economists wrote.

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Civil Service volatility: Democracy vs Bureaucracy

19th April 2021
President Masisi

Here is how one Permanent Secretary encapsulates the clear tension between democracy and bureaucracy in Botswana: “President Mokgweetsi Masisi’s Government is behaving like a state surrounded with armed forces in order to capture it or force its surrender. The situation has turned so volatile, for tomorrow is not guaranteed for us top civil servants.

These are the painful results of a personalized civil service in our view as permanent secretaries”. Although his deduction of the situation may be summed as sour grapes because he is one of the ‘victims’ of the reshuffle, he is convinced this is a perfect description of the rationale behind frequent changes and transfers characterising the current civil service.

The result of it all, he said, is that “there is too much instability at managerial and strategic levels of the civil service leading to a noticeable directionless civil service.” He continued: “Changes and transfers are inevitable in the civil service, but to a permissible scale and frequency. Think of soccer team coach who changes and transfers his entire squad every month; you know the consequences?”

The Tsunami has hit hard at critical departments and Ministries leaving a strong wave of uncertainty, many demoralised and some jobless. In traditional approaches to public administration, democracy gives the goals; and bureaucracy delivers the technical efficiency required for implementation. But the recent moves in the civil service are indicative of conflicting imperatives – the notion of separation between politicians and administrators is becoming blurred by the day.

“Look at what happened to Prisons and BDF where second in command were overlooked for outsiders, and these are the people who had sacrificially served for donkey’s years hoping for a seat at the ladder’s end. The frequency of the changes, at times affecting the same Ministry or individual also demonstrates some level of ineptitude, clumsiness and lack of foresight from those in charge,” remarked the PS who added that their view is that the transfers are not related to anything but “settling scores, creating corruption opportunities and pushing out perceived dissident and former president, Ian Khama’s alleged loyalists and most of these transfers are said to be products of intelligence detection.”

Partly blaming Khama for the mess and his unwillingness to let go, the PS dismissed Masisi for falling to the trap and failing to outgrow the destructive tiff. “Khama is here to stay and the sooner Masisi comes to terms with the fact that he (Masisi) is the state President, the better. For a President to still be making these changes and transfers signals signs of a confused man who has not yet started rolling his roadmap, if at all it was ever there. I am saying this because any roadmap comes with key players and policies,” he concluded.

The Ministry of Health and Wellness seems to be the most hard-hit by the transfers, having experienced three Permanent Secretaries changes within a year and a half. Insiders say the changes have everything to do with the Ministry being the centre of COVID-19 tenders and economic opportunities. “The buck stops with the PS and no right-thinking PS can just allow glaring corruption under his watch as an accounting officer. Technocrats are generally law abiding, the pressure comes with politically appointed leaders racing against political terms to loot,” revealed a director in the Ministry preferring anonymity.

The latest transfer of Kabelo Ebineng she says was also motivated by his firm attitude against the President’s blue-eyed Task Team boys. “The Task Team wants to own the COVID-19 pandemic and government interventions and always cry foul when the Ministry reasserts itself as mandated by law,” said the director who added that Masisi who was always caught between the crossfire decided on sacrificing Ebineng to the joy of his team as they (Task Team) were in the habit of threatening to resign citing Ebineng as the problem.

Ebineng joins the Office of the President as a deputy Coordinator (government implementation and coordination office).The incoming PS is the soft-spoken Grace Muzila, known and described by her close associates as a conformist albeit knowledgeable.

One of the losers in the grand scheme is Thato Raphaka who many had seen as the next PSP because of his experience and calm demeanour following a declaration of interest in the Southern African Development Community (SADC) Secretary post by the current PSP, Elias Magosi.

But hardly ten months into his post, Raphaka has been transferred out to the National Strategy Office in what many see as a demotion of some sort. Other notable changes coming into OP are Pearl Ramokoka formerly with the Employment, Labour and Productivity Ministry coming in as a Permanent Secretary and Kgomotso Abi as director of Public Service Reforms.

One of the ousted senior officers in the Office of the President warned that there are no signs that the changes and transfers will stop anytime soon: “If you are observant you would have long noticed that the changes don’t only affect senior officers but government decisions as well. A decision is made today and the government backtracks on it within a week. Not only that, the President says this today, and his deputy denies it the following day in Parliament,” he warned.

Some observers have blamed the turmoil in the civil service partly to lack of accountable presidential advisers or kitchen cabinet properly schooled on matters of statecraft. They point out that politicians or those peripheral to them should refrain from hampering the technical and organizational activities of public managers – or else the party (reshuffling) won’t stop.

In the view expressed by some Permanent Secretaries, Elias Magosi, has not really been himself since joining the civil service; and has cut a picture of indifference in most critical engagements; the most notable been a permanent secretaries platform which he chairs. As things stand there is need to reconcile the imperatives of democracy and democracy in Botswana. Peace will rein only when public value should stand astride the fault that runs between politicians and public managers.

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Morupisi fights for freedom in court

19th April 2021
morupisi

Former Permanent Secretary to the President, Carter Morupisi, is fighting for survival in a matter in which the State has charged him and his wife, Pinnie Morupisi, with corruption and money laundering.

Morupisi has joined a list of prominent figures that served in the previous administration and who have been accused of corruption during their tenure in office. While others have been emerging victorious, Morupisi is yet to find that luck. The High Court recently dismissed his no case to answer application.

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Pressure mounts on Biden to suspend Covid-19 vaccine patents

19th April 2021
Joe Biden

United States President, Joe Biden, is faced with a decision to make relating to the Covid-19 vaccine intellectual property after 175 former world leaders and Nobel laurates joined the campaign urging the US to take “urgent action” to suspend intellectual property rights for Covid-19 vaccines to help boost global inoculation rates.

According to the world leaders, doing so would allow developing countries to make their own copies of the vaccines that have been developed by pharmaceutical companies without fear of being sued for intellectual property infringements.

“A WTO waiver is a vital and necessary step to bringing an end to this pandemic. It must be combined with ensuring vaccine know-how and technology is shared openly,” the signatories, comprising more than 100 Nobel prize-winners and over 70 former world leaders, wrote in a letter to US President Joe Biden, according to Financial Times.

A measure to allow countries to temporarily override patent rights for Covid related medical products was proposed at the World Trade Organization by India and South Africa in October, and has since been backed by nearly 60 countries.

Former leaders who signed the letter included Gordon Brown, former UK Prime Minister; François Hollande, former French President; Mikhail Gorbachev, former President of the USSR; and Yves Leterme, former Belgian Prime Minister.

In their official communication, South Africa and India said: “As new diagnostics, therapeutics and vaccines for Covid-19 are developed, there are significant concerns [about] how these will be made available promptly, in sufficient quantities and at affordable prices to meet global demand.”

While developed countries have been able to secure enough vaccine to inoculate their citizens, developing countries such as Botswana are struggling to source enough to swiftly vaccine their citizens, something which world leaders believe it would work against global recovery therefore proving counter-productive.

Since the availability of vaccines, Botswana has been able to secure only 60 000 doses of vaccines, 30 000 as donation as from the Indian government, while the other 30 000 was sourced through COVAX facility.  Canada, has pre-ordered vaccines in surplus and it will be able to vaccinate each of its citizens six times over. In the UK and US, it is four vaccines per person; and two each in the EU and Australia.

For vaccines produced in Europe, developing countries are forced to pay double what European countries are paying, making it more expensive for already financially struggling economies.  European countries however justify the price of vaccines and that they deserve to buy them cheap since they contributed in their development.

It is evident that vaccines cannot be made available immediately to all countries worldwide with wealthy economies being the only success story in that regard, something that has been referred to as a “catastrophic moral failure”, head of the World Health Organisation (WHO), Tedros Adhanom Ghebreyesus.

The challenge facing developing countries is not only the price, but also the capacity of vaccine manufactures to be able to do so to meet global demand within a short time. The proposal for a patent waiver by India and South Africa has been rejected by developed countries, known for hosting the world leading pharmaceutical companies such US, European Union, the United Kingdom, and Switzerland.

According to the Financial Times, US business groups including pharmaceutical industry representatives, have urged Biden to resist supporting a waiver to IP rules at the WTO, arguing that the proposal led by India and South Africa was too “vague” and “broad”.

The individuals who signed the letter, including Nobel laureates in economics as well as from across the arts and sciences, warned that inequitable vaccine access would impact the global economy and prevent it from recovering.

“The world saw unprecedented development of safe and effective vaccines, in major part thanks to US public investment,” the group wrote. “We all welcome that vaccination rollout in the US and many wealthier countries is bringing hope to their citizens.”

“Yet for the majority of the world that same hope is yet to be seen. New waves of suffering are now rising across the globe. Our global economy cannot rebuild if it remains vulnerable to this virus.”
The group warned that fully enforcing IP was “self-defeating for the US” as it hindered global vaccination efforts. “Given artificial global supply shortages, the US economy already risks losing $1.3tn in gross domestic product this year.”

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