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.
In a classic and shocking case of disgrace and dishonour to this country, the law enforcement agencies are currently struggling to cover up a damaging and humiliating scandal of having conspired to forge the signature of a Palapye Chief Magistrate, Rebecca Motsamai in an unlawful acquisition of the much-publicised 2019 warrant of arrest against Isaac Kgosi, the former director of the Directorate of Intelligence Services (DIS).
The cloak-and-dagger arrest was led by the DIS director, Brigadier Peter Magosi supported by the Botswana Police, Botswana Defence Force (BDF), with the Botswana Unified Revenue Services (BURS) which accused Kgosi of tax evasion, in the backseat.
Umbrella for Democratic Change (UDC) constituent members are struggling to reach an agreement over the allocation of wards for the imminent ward by-elections across the country.
Despite a Memorandum of Understanding (MoU) between Umbrella for Democratic Change (UDC), Botswana Patriotic Front (BPF) and Alliance for Progressives (AP) are said to be active, but the nitty-gritties are far from being settled.
The eight bye-elections will be a precursor of a somewhat delayed finalisation of the brittle MoU. The three parties want to draw a plan on how and who will contest in each of the available wards.
This publication has gathered that the negotiations will not be a run off the mill because there is already an impasse between the Botswana Congress Party (BCP) which is a UDC constituent and AP (currently negotiating to join umbrella).
The by-elections joint committee met last week at Cresta President Hotel in a bid to finalise allocation but nothing tangible came out of the gathering, sources say.
The cause of the stalemate according to those close to events, is the Metsimotlhabe Ward which the two parties have set their eyes on.
In 2019, he ward was won by Botswana Democratic Party’s (BDP) Andrew Sebobi who unfortunately died in a tragic accident in February last year.
Sebobi had convincingly won by 1 109 votes in the last elections; and was trailed by Sephuthi Thelo of the UDC trailed him with 631 votes; while Alliance for Progressives’ Innocent Moamogwe got 371 votes.
Thelo is a BCP candidate and as per UDC norm, incumbency prevails meaning that the BCP will contest since they were runners up. On the other hand, AP has also raised its hand for the same.
“AP asked for it on the basis that they have a good candidate but BCP did not agree to that request also arguing they have a better contestant,” one UDC member confided to this publication.
Notwithstanding Metsimotlhabe Ward squabble, it is said the by-election talks are almost a done deal, with Botswana National Front (BNF) tipped to take Boseja South ward in Mochudi East constituency. Botswana Patriotic Front (BPF) will be awarded Tamasane Ward in Lerala/Maunatlala constituency, sources say.
“But the agreement has to be closed by National Executive Committee (NEC),” emphasized the informant.
The NEC is said to have been cautioned not to back the wrong horse but rather rate with reason and facts.
UDC President, Duma Boko has told this publication that, “allocation is complete with two wards already awarded but with only one yet to be finalized,” he could not dwell into much details as to which party got what and the reasons for the delay in finalisation.
Chairperson of the by-elections committee, Dr. Phenyo Butale responded to this publication regarding the matter: “As AP we contested and as you may be aware we signed the MoU with UDC and BPF to collaborate on bye-elections. The opposition candidate for all bye-elections will be agreed by these parties and that process is still ongoing,” he said when asked if AP is interested on the ward and how far with the talks on bye-elections.
Butale, a former Gaborone Central Member of Parliament, who is also AP Secretary General continued to say, “As the chairperson of the bye-elections committee we are still seized with that matter. We should also do some consultations with the local structures. Once the process is complete we will issue a notice for now we cannot talk about the other two while the other is still pending the other one”.
Butale further clarified: “There is no such thing as AP and BCP not in agreement. It is an issue of signatories discussing and determining the opposition candidates across the three wards.”
Apart from the three wards, there are five more council wards that UDC is yet to allocate to cooperating partners.
FROM PALAPYE MEET: BPP CAUTION NEC MEMBERS
With the UDC cheerful from last weekend’s meeting in Palapye, the meeting however was very tense on the side of both BCP and BNF, with only BPP flexing its muscle and even lashing out.
BCP going into the meeting, had promised to ask difficult questions to the UDC NEC.
BCP VP and also acting Secretary General, Dr. Kesitegile Gobotswang, presented their qualms which were addressed by UDC Chairperson Motlatsi Molapisi, informants say.
It is said Molapisi is fed up and concerned by some UDC members especially those in the NEC who ‘wash party’s dirty linen in public’.
Insiders say the veteran politician cautioned the NEC members that they “will not expel any party but individuals who tarnish the image of the UDC.”
It is not the first time BPP play a paternalistic role as it once expressed its discontent with BCP in 2020, saying it should never wash UDC linen in public.
At first it is said, BPP, the oldest political formation in Botswana, claims disappointment on BCP stance that UDC should be democratised especially by sharing their stand with the media. Again, BPP was not happy with BCP leader Dumelang Saleshando’s decision to air his personal views on social media regarding the merger of UDC party.
Botswana Police Service (BPS) Commissioner, Keabetswe Makgophe, has of late been dousing raging fires from various quarters of society following the infiltration of the police fingerprint system by the Directorate on Intelligence and Security (DIS), WeekendPost has learnt.
Fresh information gleaned from a number of impeccable sources, points to a pitiable working relationship between the two state organs. Cause of concern is the DIS continuous big brother role to an extent that it is now interfering with other institutions’ established mandates.
BPS which works closely with the DIS has been left exasperated by the works of the institution formed in 2008. It is said, the DIS through its Information Technology (IT) experts in collusion with some at BPS forensics department managed to infiltrate the Fingerprint system.
The infiltration, according to those in the know, was for the DIS to “teach a lesson” to some who are on their radar. It is said the DIS is playing and fighting dirty to win the fights they have lost before.
By managing to hack the police finger print system, a number of renowned businessmen and other politically exposed persons found their fingers in the system. What surprised the victims is the fact that they have never been charged of any wrongdoing by the police and they were left reeling in shock to learn that their fingers are on the data-base of criminals.
In fact, some of those who their fingerprints were falsely included in the records of those on the wrong side of law learnt later when other errands demanded their fingerprints.
“We learnt later when we had to submit and buy some documents and we were very shocked,” one politician who is also a businessman confided to this publication this week.
“We then learn that there are some fabricated criminality recorded for us, as to when did we commit those remained secret to the police, but then we had to engage our lawyers on the matter and that is when we were cleared,” said the politician-cum- tenderpreneur.
The lawyers have confirmed engaging the police and that the matters were settled in a gentlemen’s agreement and concluded.
All these happened behind the scenes with the police top brass oblivious only to be confronted by the irked lot, police sources also add. The victimized group who most of them have been fighting lengthy battles with the DIS read malice and did not blink when it was revealed that these were done by the DIS.
“And it was clear that they (DIS) are the ones in this dirty war which we don’t understand. Remember when we sue, it will be the Police at the courts not the DIS and that is why we agreed to a ceasefire more so they also requested that be kept under carpet,” said the victim.
Nonetheless, the Police through its spokesperson Assistant Commissioner, Dipheko Motube, briefly said: “we do not have any system that has been hacked.” On the other hand DIS mouthpiece Edward Robert was not in office this week to comment on the matter.
Reports however say DIS boss, Peter Magosi, who most of the victims accuse of the job, is said to have met his police counterpart Makgophe to put the matter to bed.
COVID-19 RAVAGES POLICE
As frontline workers, Police have not escaped the wrath of Covid-19. Already the numbers of those infected has reached the highest of high and they suggest that they be priorities on vaccine rollout.
“Our job is complicated, firstly we arrest including those who are non-compliant to Covid protocols and we go to accidents and many more. These put us at risk and it seems our superiors are not bothered,” said one police officer this week.
The cops further complain about that working spaces are small, as such expose them to contact the virus.
“Some tests positive and go for quarantine while the rest of the unit will be left without even test carried out. If at all the bosses are serious all the police officers should every now and then be subjected to testing or else we will be no more because of the virus,” added another officer based in Gaborone.
The government has since placed teachers on the priority list for the vaccines, it remains to be seen whether the police, who also man road blocks, will be considered.
“But our bosses should convince the country leadership about this, if not then we are doomed,” concluded a more senior officer.