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Import car dealers give up! BURS has won!

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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Masisi, DIS come under scrutiny at UN Rights Committee 

25th October 2021
masisi & magosi

President Dr Mokgweetsi Masisi and the Directorate of Intelligence (DIS) came under the lens of the United Nations Human Rights Committee during the just ended dialogue between committee members and the Botswana delegation. 

Scores of issues, among them the country’s reports on topics including whether Masisi abused the State of Emergency Act during the COVID-19 pandemic and alleged surveillance and harassment of members of the public by DIS, were addressed at the session.

A Committee expert asked about legislation in the Penal Code allowing the Government to investigate people who expressed opinions against public figures, particularly the President. How many cases were there of journalists who had been investigated, prosecuted and tried?
Concerning the COVID-19 Emergency Powers Act, there was a provision for a fine or a five-year jail term for journalists using “source(s) other than the Director of Health Services or the World Health Organization” when reporting on COVID-19. The Committee Expert asked for the number of cases and other measures taken under this Act.

Another committee expert wanted to know that the scale and scope of electronic surveillance, which had sharply increased in recent years, was concerning. Furthermore, the Committee was troubled at the lack of a sufficient independent oversight mechanism over the Directorate of Intelligence and Security Services that reportedly had contributed to a growing climate of fear and chilling effect on journalists, human rights defenders and opposition politicians. In this respect, a Committee Expert asked about the measures taken by Botswana during the COVID-19 pandemic to ensure that the right to privacy was protected (collection and management of personal data).

The Expert also enquired about a database website, which was not functioning but was supposed to contain documents of Botswana’s international human rights commitments.
In terms of the freedom of assembly, while the Constitution of the State party guaranteed it, the Committee had received information that, in practice, the Public Order Act required citizens to apply to the nearest police for a permit to hold an assembly, and police had sometimes denied requests for unclear reasons.

The Committee Expert asked if the Public Order Act of the State party had been applied in conformity with those tests. Would the State party indicate the measures it had taken and/or intended to take to make the application of the law in question strictly compatible with the requirements under article 21? Furthermore, the Committee had also received allegations that police officers sometimes used force to compel gathering people to disperse. In this regard, the Expert asked for information on legal provisions and practical guidelines under which police officers may resort to force and any training programme if any, for police and other law enforcement officers to respect and ensure the right of peaceful assembly.

A Committee Expert asked about cases of holding people for longer periods under pre-trial detention than the maximum period provided for in legislation, 36 months, instead of six. Were there any plans to shorten the duration of pre-trial detention in legislation? The Committee noted that there was no provision for local community broadcasting. What measures were the State party taking to ensure that the local communities could also communicate in their language in the media?

What measures had been undertaken by Botswana to increase sustainable development in the country regarding climate change in particular. What efforts had been undertaken to ensure that customary courts worked up to speed? A Committee Expert asked about children in rural areas who travelled a long way to their schools. The delegation was asked about the independence of the Ombudsman Office, including provisions for appointing the Ombudsman. What budget was envisaged for this Office?

The Expert acknowledged the established procedures and institutions for anti-human trafficking but expressed concerns about the lack of reported cases. The Expert asked about the accountability of the public prosecution, as well as the intelligence services. Replying, the Botswana delegation, led by Presidential Minister Kabo Morwaeng, said there was an ongoing consultation for revising provisions that would ensure better protection for journalists and media freedom in Botswana.

Still, the delegation said, freedom of expression was assured in the State party without any restrictions, including in Parliament. There was an education programme providing the opportunity for children in primary school to be taught in their mother tongue. It also explained that the Ombudsman would be dealing with issues of human rights promotion and protection.

“National policies and procedures were envisaged to control the distribution of natural resources. Botswana was also taking measures to increase the access of minority groups to education. Regarding pre-trial detention, the delegation explained that the criminal procedure assured justice was preserved in the country,” said the delegation.

On the issue of torturer and alleged use of unreasonable force on suspects, the Botswana delegation explained that police officers were trained to use minimal force, ensuring that human rights were preserved, including in the cases of assemblies. On the use of surveillance, no legal provisions were breached, and such measures were used in accordance with national legislation. Legal aid was very costly, and it was not possible to keep the record in detail as asked by the Committee.

Morwaeng told the Committee that the Government maintained a robust consultative approach to policy development and legislative process. He said this was a system of governance that ensured that the voices of ordinary citizens were respected and taken into account in the social, economic and political process that affected them the most, giving full effect to the full enjoyment of human rights across the board. The delegation took due note of the views of the Committee, including the importance of harnessing information technology to give a broader appreciation of the provisions of the Covenant.

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Masisi on P1 billion water investment

25th October 2021
water project

The P1 billion water project launched by President Dr vMokgweetsi Masisi this week is said to be critical to the success of key projects planned in Lobatse – the Lobatse Milk Afric and Leather Park. After commissioning the multi-million Pula Masama-Mmamashia water project last week following its completion, on Thursday, Masisi performed ground-breaking ceremony of yet another major water project, the Lobatse Water Supply Master Plan (LWSMP1).

The water project was conceptualized in 2009 to address water shortage in areas along the Greater Gaborone zone. These areas include Ramotswa, Otse, Mogobane, Mankgodi, Manyana, Goodhope, Lekgolobotlo, Mmathethe, Molapowabojang and villages surrounding. It was said that some major upcoming projects in Lobatse such as Lobatse Leather Park, Milk Afric and the Pioneer Border Gate are dependent on the success of this project, in order for them to take off and operate effectively. The two projects have been struggling to take-off despite government having put the necessary resources.

The Lobatse Leather Park is anticipated to create about 4700 jobs at the initial stage and 7000 jobs at full capacity. The project entails the development of a complex for different tanneries with the support of state-owned beef company, Botswana Meat Commission. It will comprise primary infrastructure such as a common effluent treatment plant, sewage treatment plant, and others.

When operational, the park is expected to supply the private sector with hides and skins, raw to finished leather tanneries, and the manufacturing of different leather products. These products include shoes, belts, jackets, and others, thereby playing an instrumental role in stimulating economic activity. Leather Beneficiation Park is seen as important for the leather industry as it would ensure that Botswana moves from exporting raw leather to finished leather goods. It is said research has established that there are plenty of hides and skins in the country from the three million cattle and 1.8 million goats.

Meanwhile, Milk Afric dairy farm project which was expected to be complete by the second half of 2018, is in the wilderness after the initial partnership between Botswana Development Corporation (BDC) and Milk Afric failed to bear fruits. BDC has been searching for a new partner for the project. Once fully operational, the farm will produce a total of 21.9 million litres or one third of the national milk demand, which is 65 million litres a year. At present, Botswana imports over 58.8 million litres from South Africa at a cost of P345 million annually.

The P120 million project is a Public Private Partnership deal between Lobatse Town Council (LTC),  with 10 percent shareholding through leasing its 1375.4 ha farm for 25 years; and 26 percent (P40 million) by Botswana Development Corporation (BDC). When speaking at the groundbreaking ceremony held in Ramotswa, Masisi said, in addition to improving the water supply for domestic needs and livelihoods, this infrastructural development will facilitate major projects in the Lobatse region, which are critical to the ailing, old town.

“Our objective as a country is to align developments with the National Vision 2036 Pillar 3 on Sustainable Development, which recognizes water as a very scarce resource which requires strategic management by key players.” Botswana is a developing country with an increasing population, Masisi said, adding that an increase in population naturally causes exponential growth in the demand for water. This is a reality that Botswana is faced with and challenged to address for sustainable water supply, the President said.

He indicated that this is why they are continuously witnessing major water projects undertaken by government, in collaboration with key partners. “Gaborone and surrounding areas have been experiencing an acute water supply deficit due to infrastructure that has outlived its potential to meet the growing demand for water by citizens. This particular project entails the construction of a Pump Station at Forest Hill in Gaborone, a 57 kilometre pipeline from Gaborone to Lobatse and a new Northern reservoir.”

The project, awarded China State Construction and Engineering Corporation/Van and Truck Hire Joint Venture at over P1 billion, is currently at 49% of its completion stage. There are 637 jobs created by this water project. “The transmission pipeline will convey 63 million litres of water a day from Gaborone to Lobatse. This is a great improvement compared to an average supply of 14 million litres of water that has been supplied to Lobatse, Borolong and surrounding areas,” Masisi said.

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UN quizzes Botswana on gays, Sebina defilement case

25th October 2021
EU

The United Nations Committee on Human Rights has taken Botswana to task over what it considers to be discrimination laws against lesbians and gays and delay in prosecuting suspects in the infamous Sebina defilement case.  The Botswana delegation led by Presidential Minister Kabo Morwaeng found itself against the wall before the United Nations Human Rights Committee of experts in Geneva, Switzerland.  

First to take Botswana head-on was the UN Committee member, C SOH, who noted that the recent ruling of the High Court pays particular attention to the penal code penalising same-sex sexual conduct as it found that it infringed on the constitutional rights, dignity, liberty and privacy of the LGBTI persons (lesbians and gays).  “Nonetheless, I note with deep concern that those discriminatory provisions of the of the penal code remain in effect and regrettably the government stated in its periodic review before deciding whether or not to repeal section 164 it would still await the final determination of the court of appeal in the case of Motshidiemang vs State,” said Soh.

According to Soh, “This statement makes us cast doubt on the will of the government to vigorously” strike out section 164, which criminalises sex between people of the same sex.  “In this respect, I would like to ask the delegation to explain what the intended goal by the government was when it filed an appeal against the unconstitutionality ruling of the High Court,” he said. Soh said the Botswana Government had also explained that no persons had been convicted under this provision, section 164, ever since the penal code was enacted.

“However, media reports indicate that in August 2016, the government of a Gaborone Magistrate Court sentenced a man three years in prison who had been charged and convicted under section 164 for engaging in unnatural acts. Can the delegation explain these discrepancies relating to persons who have been convicted and sentenced under section 164 of the penal code,” he said.  He also wanted the Botswana delegation to explain how the government addresses how customary courts have been discriminating against LGBTI persons.

Another member of the UN Committee, Duncan Muhumuza, expressed concern that the Directorate of Public Prosecution (DPP) has taken more than four years to prosecute suspects in the Sebina saga in which a councillor was alleged to have slept with a student who was also a minor.
Replying to concerns raised by the UN experts, Mogakolodi Segwagwa, chief state counsel at the Attorney General Chambers, noted that one of the UN committee members has “become fearful that the fact that government appealed the case could be a sign that there is lack of will or doubt on the part of the government as to abolishing or outlawing of same-sex relations.”

“But I would like to assure the panel that Botswana has over the years proved itself at all times to be compliant with court orders. There are many examples I could put forward where the government had to make sure that court orders were executed. That is the assurance I can give out to the committee,” said Segwagwa.  He said there was a good reason for appealing the decision of the High Court in which it outlawed section 164.

“This was a High Court decision, and as you know in our jurisdiction when a judge is at the same court with his brothers and his sisters and fellow judges, whatever decision he puts out so far as that particular court is concerned, it is not law because it is not binding on his fellow brothers and sisters and it is not binding on fellow judges,” explained Segwagwa. He added that “It is merely persuasive so much so that some other judges may choose to when a similar case comes before him or her, depart and ignore the position that that particular judge espoused, and he or she can do so with ease.”

Segwagwa further explained that “There was a very pressing need for this matter to be appealed to the Court of Appeal for purposes of crystalising the law and for purposes of ensuring that if there is any aspect of the law that the High Court had overlooked in arriving at this particular decision, then such an aspect can be taken into consideration by the Court of Appeal.” “So we are waiting for that judgement, and once it comes, it will be implemented. I take it that the committee would like the Court of Appeal to uphold the decision below and strike out this particular section.”

He assured the UN experts that when the High Court struck out section 164 in 2019, the country did not erupt into violence, adding that this was an “indication that we don’t have anything against people of LGBT. They are our brothers and sisters, and we co-exist with them.”  Regarding the Sebina saga, Segwagwa said the painful case “where this councillor was said to have had sexual intercourse with a child is the police dealt with a matter as it is the law and we all know that the police are bound by their Act to do so without fear and prejudice.”

He said Upon completion of their investigation, “the matter was handed over to the prosecuting authority, as Mr Muhumuza had indicated, it has been four years and we concede that four years is a long time and that it is unreasonably a long time and that it defeats the whole adage that justice should be sweetest and freshest so much so that the case needed to be speeded along.”

He added that “But the problem we have which is not a problem in the sense of it being a problem, but the impediment we have in the sense that the Constitution created the Office of the Director of Prosecutions under section 51 subsection A and if you go to that particular section and you read subsection six, the director shall not be subjected to the control of another authority.”

Segwagwa said, “this is the section that was inserted in this constitution to safeguard the independence of the Director of DPP to ensure that he or she prosecutes matters without fear, favour and prejudice and it presents impediment where we can’t try and say to the DPP, go and register or indicate your position now, tomorrow or next year and that is why it has taken all this time, but we believe attempts are being made that it finds its way to the court.”

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