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Friday, 19 April 2024

Import car dealers give up! BURS has won!

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Botswana’s import car industry market future looks bleak following the recent unearthing of massive tax evasion by the dealerships at the behest of Botswana Unified Revue Services (BURS).  

WeekendPost has established that given the tax the car dealers have been evading for years running in millions, dealers will likely not be able to pay the dues to the government coffers anytime soon. It is understood that the move may see many of them closing down for good following the flouting of the customs duty law.  One of the fong kong car dealers, Brian Tom of Tom’s Import cars, told WeekendPost this week that: “Let us forget about the import cars. The BURS guys have closed in on us, and it looks permanent (closure).”

He added that the, “tax collectors are even refusing with those cars they have possessed. They valued these cars and after we pay for the valuation they refused to give the cars back on reasons that they are investigating us. And these cars are our money. We bought them with our cash with expectation that they will be bought to accumulate back the money.” This publication understands that as the tax man cracks the whip, 1522 vehicles have been confiscated so far from 24 car dealerships in Mogoditshane.

“We have written extensive statements and affidavits at Police on how we have been buying these imported cars from Durban in South Africa. It seems like they want to further incarcerate us for doing such business,” he pointed out. The Import car dealer highlighted that it will be difficult to sell these imports going forward while adding that: “it’s either they want to stop us from doing this business or they want to do it themselves.” The car dealer emphasised that there are no jobs in the country but they are just shutting down the industry which has employed many Batswana.

“As I speak, all garages in Mogoditshane have been closed up. All offices selling cars have also been closed. Even my office is closed. It’s been closed since January up to now. As the month comes to an end I don’t know what to do for survival,” he said adding that he has even given up. “I am contemplating on removing all the branding in the office and look for a different business or go back to the village. I am giving up,” he highlighted.  

Tom also took time to further tell this publication that he regrets casting his vote in favour of the ruling Botswana Democratic Party (BDP) as he did not listen to someone who persuaded him to remove the party from power. “If President Dr Mokgweetsi Masisi knows about all these things then he is not fit for office. You cannot attack an existing car industry. This industry has even employed people. People make a living through selling these cars,” he lambasted.

Meanwhile, a customer of the imported cars, Thabang Letsibogo also threw in his penny about the matter from a local customer perspective. He cited the business mogul Satar Dada who might have politically influenced the tax man to go for the dealers who sell at a cheaper price than big dealers.  

“I think Satar Dada fears competition. He controls the economy of this country and enjoys monopoly. Like the infamous Guptas in South Africa, this is done just to favour him. But cars at Motor Centre and Barloworld are very expensive,” the fong kong customer stressed out.  
He continued to highlight that the economy of Mogoditshane is now collapsing due to the prevailing circumstances. Mogoditshane will be a ghost village soon with all car garages closed, he said.

Another customer who spoke on condition of anonymity pointed a finger at the import car dealership. He warned that “they have to do business the proper way. But it is not over. They can pay the fines, then withdraw from doing shady deals.” When a car was bought at P40 000 from Durban they must not down price it to P20 000 to dodge tax at the border, that money should have gone into the country to provide key developments.

He observed that “the only "danger" that they are facing in future, if the dealers manage to open up, as Mogoditshane cars consumers – is inflated prices. Just as example, he said, a Honda fit which now costs around P20 000 will probably then be escalated to cost approximately P45 000. When reached for comment, Motor Centre Toyota Botswana proprietor Dada dismissed the assertion that he fears competition: “We don’t sell those cheap cars. It’s totally different. Different markets.”

On his alleged political interference to curb competition from such dealers he told WeekendPost that there is: “no political interference. Nothing like that,” while attacking the fong kong import dealers to pay tax: “why do it in the first place? The problem is with these guys because they are not paying the duty. They are at fault with the law. It’s that simple. No problem in seeing that.”

Independent Lawyer view of the BURS v Car Dealers saga

A Gaborone based attorney, Karabo Nkitseng of Ndina Law Firm highlighted to Weekend Post that BURS is right to fight against Tax leakages, but only to an extent that they satisfy themselves that indeed there is tax leakage. He pointed out that the biggest worry is founded on an assumption that the actual tax payer is the customer, the question then should never be about affordability. “There should be no outcry from car dealers’ because they only paying tax over the actual cost and will recover that on the purchase price as the pass on cost to consumers,” attorney Nkitseng stated.

He explained: “I want to believe that these guys are simply saying we buy cars at 500 US dollars even though they know they bought at 2000 US dollars, so the 500 US dollars is simply for computation of customs duty, but when they get to the customer they price on the 2000 US dollars. You can imagine big players at Mogoditshane car dealers doing that with over 1000 cars?’’ he wondered.

“Which means their savings is on the leakage. That is what is happening on the ground. And how much those guys are pocketing. How much is the government losing. So to curb this it should be a joint effort between Competition and Consumer Authority with BURS. That way all stakeholders are being protected.” According to the Senior Counsel, with small individuals doing the business, for example they buy a car for BWP 50 000, then the dealer at Durban gives them a receipt of 30 000 so that 'customer' or owner of the car can pay less tax on it.

“The emphasis of paying tax should be directed mostly to big import car companies as they are seriously evading tax charges,” he highlighted.The reason right now, he explained, why one can negotiate a high price reduction at Mogoditshane is not even competition based, it’s simply the one going below just eating up on his profit margin because of the tax leakage.

He further observed that if one gets an individual buying vehicles and declaring the actual cost then customs duty is properly charged and he goes to Mogoditshane to sell, his price build up is then inclusive of customs duty price component, he is then forced to VAT register in order to recoup the tax component, he then will sell the vehicles to consumers who will be buying with a proper cost reflective price.

“Once the prices are excessive Competition and Consumer Authority would know from the declaration that was made at the time of payment of customs duty. We as customers then just buy thinking we got a better deal,” he said. According to the lawyer, the only fear car dealers are facing is that they are going to lose business. Meanwhile BURS Acting Commissioner General (CG) Segolo Lekau recently confirmed to Weekend Post that a number of businesses especially those importing goods are trespassing the customs law.

“It appears the citizens are working hand in hand with these businessmen and agree to be given falsified payment documents that do not necessarily depict the real price. At the end government is losing a lot of money because we claim less than we should be from SACU,” said the Acting CG. Lekau continued; “this now may force the government to increase tax because she may feel that what she is getting is very low as she will not be getting the actual custom duty and VAT corresponding with the product imported.”

Following the seizure of cars in Mogoditshane, Lekau told this publication that they may now start setting prices for ‘Fong-Kong’ cars. This comes after this publication recently reported that BURS is swimming in a pool of more than P3.3 billion debt emanating from uncollected tax arrears. According to BURS annual report 2018, BURS is failing to manage its debt by effectively and efficiently collecting the arrears to make sure the funds reach the government coffers for development of the country.

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Nigerians, Zimbabweans apply for Chema Chema Fund

16th April 2024

Fronting activities, where locals are used as a front for foreign-owned businesses, have been a long-standing issue in Botswana. These activities not only undermine the government’s efforts to promote local businesses but also deprive Batswana of opportunities for economic empowerment, officials say. The Ministry of Trade and Industry has warned of heavy penalties for those involved in fronting activities especially in relation to the latest popular government initiative dubbed Chema Chema.

According to the Ministry, the Industrial Development Act of 2019 clearly outlines the consequences of engaging in fronting activities. The fines of up to P50,000 for first-time offenders and P20,000 plus a two-year jail term for repeat offenders send a strong message that the government is serious about cracking down on this illegal practice. These penalties are meant to deter individuals from participating in fronting activities and to protect the integrity of local industries.

“It is disheartening to hear reports of collaboration between foreigners and locals to exploit government initiatives such as the Chema Chema Fund. This fund, administered by CEDA and LEA, is meant to support informal traders and low-income earners in Botswana. However, when fronting activities come into play, the intended beneficiaries are sidelined, and the funds are misused for personal gain.” It has been discovered that foreign nationals predominantly of Zimbabwean and Nigerian origin use unsuspecting Batswana to attempt to access the Chema Chema Fund. It is understood that they approach these Batswana under the guise of drafting business plans for them or simply coming up with ‘bankable business ideas that qualify for Chema Chema.’

Observers say the Chema Chema Fund has the potential to uplift the lives of many Batswana who are struggling to make ends meet. They argue that it is crucial that these funds are used for their intended purpose and not siphoned off through illegal activities such as fronting. The Ministry says the warning it issued serves as a reminder to all stakeholders involved in the administration of these funds to ensure transparency and accountability in their disbursement.

One local commentator said it is important to highlight the impact of fronting activities on the local economy and the livelihoods of Batswana. He said by using locals as a front for foreign-owned businesses, opportunities for local entrepreneurs are stifled, and the economic empowerment of Batswana is hindered. The Ministry’s warning of heavy penalties is a call to action for all stakeholders to work together to eliminate fronting activities and promote a level playing field for local businesses.

Meanwhile, the Ministry of Trade and Industry’s warning of heavy penalties for fronting activities is a necessary step to protect the integrity of local industries and promote economic empowerment for Batswana. “It is imperative that all stakeholders comply with regulations and work towards a transparent and accountable business environment. By upholding the law and cracking down on illegal activities, we can ensure a fair and prosperous future for all Batswana.”

 

 

 

 

 

 

 

 

 

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Merck Foundation and African First Ladies mark World Health Day 2024

15th April 2024

Merck Foundation, the philanthropic arm of Merck KGaA Germany marks “World Health Day” 2024 together with Africa’s First Ladies who are also Ambassadors of MerckFoundation “More Than a Mother” Campaign through their Scholarship and Capacity Building Program. Senator, Dr. Rasha Kelej, CEO of Merck Foundation emphasized, “At Merck Foundation, we mark World Health Day every single day of the year over the past 12 years, by building healthcare capacity and transforming patient care across Africa, Asia and beyond.

I am proud to share that Merck Foundation has provided over 1740 scholarships to aspiring young doctors from 52 countries, in 44 critical and underserved medical specialties such as Oncology, Diabetes, Preventative Cardiovascular Medicine, Endocrinology, Sexual and Reproductive Medicine, Acute Medicine, Respiratory Medicine, Embryology & Fertility specialty, Gastroenterology, Dermatology, Psychiatry, Emergency and Resuscitation Medicine, Critical Care, Pediatric Emergency Medicine, Neonatal Medicine, Advanced Surgical Practice, Pain Management, General Surgery, Clinical Microbiology and infectious diseases, Internal Medicine, Trauma & Orthopedics, Neurosurgery, Neurology, Cardiology, Stroke Medicine, Care of the Older Person, Family Medicine, Pediatrics and Child Health, Obesity & Weight Management, Women’s Health, Biotechnology in ART and many more”.

As per the available data, Africa has only 34.6% of the required doctors, nurses, and midwives. It is projected that by 2030, Africa would need additional 6.1 million doctors, nurses, and midwives*. “For Example, before the start of the Merck Foundation programs in 2012; there was not a single Oncologist, Fertility or Reproductive care specialists, Diabetologist, Respiratory or ICU specialist in many countries such as The Gambia, Liberia, Sierra Leone, Central African Republic, Guinea, Burundi, Niger, Chad, Ethiopia, Namibia among others. We are certainly creating historic legacy in Africa, and also beyond. Together with our partners like Africa’s First Ladies, Ministries of Health, Gender, Education and Communication, we are impacting the lives of people in the most disadvantaged communities in Africa and beyond.”, added Senator Dr. Kelej. Merck Foundation works closely with their Ambassadors, the African First Ladies and local partners such as; Ministries of Health, Education, Information & Communication, Gender, Academia, Research Institutions, Media and Art in building healthcare capacity and addressing health, social & economic challenges in developing countries and under-served communities. “I strongly believe that training healthcare providers and building professional healthcare capacity is the right strategy to improve access to equitable and quality at health care in Africa.

Therefore, I am happy to announce the Call for Applications for 2024 Scholarships for young doctors with special focus on female doctors for our online one-year diploma and two year master degree in 44 critical and underserved medical specialties, which includes both Online Diploma programs and On-Site Fellowship and clinical training programs. The applications are invited through the Office of our Ambassadors and long-term partners, The First Ladies of Africa and Ministry of Health of each country.” shared Dr . Kelej. “Our aim is to improve the overall health and wellbeing of people by building healthcare capacity across Africa, Asia and other developing countries. We are strongly committed to transforming patientcare landscape through our scholarships program”, concluded Senator Kelej.

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Interpol fugitive escapes from Botswana

15th April 2024

John Isaak Ndovi, a Tanzanian national embroiled in controversy and pursued under a red notice by the International Criminal Police Organization (Interpol), has mysteriously vanished, bypassing a scheduled bail hearing at the Extension 2 Magistrate Court in Gaborone. Previously apprehended by Botswana law enforcement at the Tlokweng border post several months earlier, his escape has ignited serious concerns.

Accused of pilfering assets worth in excess of P1 million, an amount translating to roughly 30,000 Omani Riyals, Ndovi has become a figure of paramount interest, especially to the authorities in the Sultanate of Oman, nestled in the far reaches of Asia.

The unsettling news of his disappearance surfaced following his failure to present himself at the Extension 2 Magistrate Court the preceding week. Speculation abounds that Ndovi may have sought refuge in South Africa in a bid to elude capture, prompting a widespread mobilization of law enforcement agencies to ascertain his current location.

In an official communiqué, Detective Senior Assistant Police Commissioner Selebatso Mokgosi of Interpol Gaborone disclosed Ndovi’s apprehension last September at the Tlokweng border, a capture made possible through the vigilant issuance of the Interpol red notice.

At 36, Ndovi is implicated in a case of alleged home invasion in Oman. Despite the non-existence of an extradition treaty between Botswana and Oman, Nomsa Moatswi, the Director of the Directorate of Public Prosecution (DPP), emphasized that the lack of formal extradition agreements does not hinder her office’s ability to entertain extradition requests. She highlighted the adoption of international cooperation norms, advocating for collaboration through the lenses of international comity and reciprocity.

Moatswi disclosed the intensified effort by law enforcement to locate Ndovi following his no-show in court, and pointed to Botswana’s track record of extraditing two international fugitives from France and Zimbabwe in the previous year as evidence of the country’s relentless pursuit of legal integrity.

When probed about the potential implications of Ndovi’s case on Botswana’s forthcoming evaluation by the Financial Action Task Force (FATF), Moatswi reserved her speculations. She acknowledged the criticality of steering clear of blacklisting, suggesting that this singular case is unlikely to feature prominently in the FATF’s assessment criteria.

 

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