Banks have among their service products a vehicle and asset financing scheme where a customer requests for the bank to purchase a vehicle or machinery through a finance lease arrangement. The bank will then buy the vehicle or machinery on behalf of the customer and the customer pays the bank through some instalments at a premium.
There has been a contention on whether per the banking act banks are allowed to carry out such arrangements or not and if indeed the agreement between the bank and the customer is a valid sales agreement. Bank Gaborone and Commissioner General (CG) of Botswana Unified Revenue Service (BURS) had a dispute on this matter and it was addressed by various courts until it reached the Court of Appeal where it issued a ruling on the 26th of July 2019.
The CG contended that the bank is exclusively in the business of supplying loans of which interest earned from the loans in an exempt supply while the loans (supply of money) is a non-supply. BURS therefore disallowed the input tax that was claimed by the bank on vehicles purchased from suppliers and this resulted in additional liability of P3.9m. They argued that the agreement entered into by the bank and its customers were not commercially sensible and were just a sham to minimize their tax liability. The Board of Adjudicators and High Court agreed with the CG that the agreement entered into between the parties didn’t make a commercial sense and were entered into to avoid tax. The CG argued before the CoA that the Bank did not add value to the consumption chain because it bought and sold the vehicle for the same price and therefore the transaction could have not related to taxable supplies.
The Bank on the other hand contended that this arrangement is a finance lease under a credit agreement and therefore qualifies as a supply per the Valued Added Tax Act (VAT Act). It further argued that the agreements entered into with the customers are valid and makes commercial sense, the CoA at paragraph 35 also held that the Act does not require the addition of value to a product for VAT to be chargeable. This view makes the arrangement between the 3 parties a legit transaction. The Court of Appeal therefore agreed with the bank that the input claims by the bank from invoices issued by suppliers of the vehicles were correct and no assessments should have been raised against those. The Court at paragraph 46 further held that:
“All three parties to the deal had the same honest intention of enabling the customer to purchase a vehicle, financed by the Bank, and ensuring that the Bank held ownership until due payment. The High Court was accordingly wrong when it held that the instalment sale agreement served no commercial purpose”. This case therefore ensures that the current practice of declaring the output tax on the sale to the customer and claiming input tax on the supply from the vehicle supplier is correct and should be upheld. The bank had no intention whatsoever to defraud the taxman and declare less output tax as it should.
It should also be noted that the arrangement is such that the bank will claim input tax on the purchase from the dealer and declare output tax on the sale of the vehicle to the customer. Consequently, this is a net-off effect which result in no loss to the fiscus as the bank is claiming the same amount that has been declared before and none of the parties between BURS and the bank having an advantage over the other party. It must be noted that though the CoA interpreted the arrangement between the bank and customer to be falling within the ambit of a Hire Purchase Agreement, purchase of vehicles or machinery through a financier is generally referred to as a Finance Lease Agreement in financial services circles. The VAT Act recognizes finance leases as credit agreements.
NB: The article was first published on WordPress and LinkedIn on the 30th August 2019.
In 2005, the Business & Economic Advisory Council (BEAC) pitched the idea of the establishment of Special Economic Zones (SEZs) to the Mogae Administration.
It took five years before the SEZ policy was formulated, another five years before the relevant law was enacted, and a full three years before the Special Economic Zones Authority (SEZA) became operational.
… courtesy of infiltration stratagem by Jehovah-Enlil’s clan
With the passing of Joshua’s generation, General Atiku, the promised peace and prosperity of a land flowing with milk and honey disappeared, giving way to chaos and confusion.
Maybe Joshua himself was to blame for this shambolic state of affairs. He had failed to mentor a successor in the manner Moses had mentored him. He had left the nation without a central government or a human head of state but as a confederacy of twelve independent tribes without any unifying force except their Anunnaki gods.
If I say the word ‘robot’ to you, I can guess what would immediately spring to mind – a cute little Android or animal-like creature with human or pet animal characteristics and a ‘heart’, that is to say to say a battery, of gold, the sort we’ve all seen in various movies and tv shows. Think R2D2 or 3CPO in Star Wars, Wall-E in the movie of the same name, Sonny in I Robot, loveable rogue Bender in Futurama, Johnny 5 in Short Circuit…
Of course there are the evil ones too, the sort that want to rise up and eliminate us inferior humans – Roy Batty in Blade Runner, Schwarzenegger’s T-800 in The Terminator, Box in Logan’s Run, Police robots in Elysium and Otomo in Robocop.
And that’s to name but a few. As a general rule of thumb, the closer the robot is to human form, the more dangerous it is and of course the ultimate threat in any Sci-Fi movie is that the robots will turn the tables and become the masters, not the mechanical slaves. And whilst we are in reality a long way from robotic domination, there are an increasing number of examples of robotics in the workplace.
ROBOT BLOODHOUNDS Sometimes by the time that one of us smells something the damage has already begun – the smell of burning rubber or even worse, the smell of deadly gas. Thank goodness for a robot capable of quickly detecting and analyzing a smell from our very own footprint.
A*Library Bot The A*Star (Singapore) developed library bot which when books are equipped with RFID location chips, can scan shelves quickly seeking out-of-place titles. It manoeuvres with ease around corners, enhances the sorting and searching of books, and can self-navigate the library facility during non-open hours.
DRUG-COMPOUNDING ROBOT Automated medicine distribution system, connected to the hospital prescription system. It’s goal? To manipulate a large variety of objects (i.e.: drug vials, syringes, and IV bags) normally used in the manual process of drugs compounding to facilitate stronger standardisation, create higher levels of patient safety, and lower the risk of hospital staff exposed to toxic substances.
AUTOMOTIVE INDUSTRY ROBOTS Applications include screw-driving, assembling, painting, trimming/cutting, pouring hazardous substances, labelling, welding, handling, quality control applications as well as tasks that require extreme precision,
AGRICULTURAL ROBOTS Ecrobotix, a Swiss technology firm has a solar-controlled ‘bot that not only can identify weeds but thereafter can treat them. Naio Technologies based in southwestern France has developed a robot with the ability to weed, hoe, and assist during harvesting. Energid Technologies has developed a citrus picking system that retrieves one piece of fruit every 2-3 seconds and Spain-based Agrobot has taken the treachery out of strawberry picking. Meanwhile, Blue River Technology has developed the LettuceBot2 that attaches itself to a tractor to thin out lettuce fields as well as prevent herbicide-resistant weeds. And that’s only scratching the finely-tilled soil.
INDUSTRIAL FLOOR SCRUBBERS The Global Automatic Floor Scrubber Machine boasts a 1.6HP motor that offers 113″ water lift, 180 RPM and a coverage rate of 17,000 sq. ft. per hour
These examples all come from the aptly-named site www.willrobotstakemyjob.com because while these functions are labour-saving and ripe for automation, the increasing use of artificial intelligence in the workplace will undoubtedly lead to increasing reliance on machines and a resulting swathe of human redundancies in a broad spectrum of industries and services.
This process has been greatly boosted by the global pandemic due to a combination of a workforce on furlough, whether by decree or by choice, and the obvious advantages of using virus-free machines – I don’t think computer viruses count! For example, it was suggested recently that their use might have a beneficial effect in care homes for the elderly, solving short staffing issues and cheering up the old folks with the novelty of having their tea, coffee and medicines delivered by glorified model cars. It’s a theory, at any rate.
Already,customers at the South-Korean fast-food chain No Brand Burger can avoid any interaction with a human server during the pandemic. The chain is using robots to take orders, prepare food and bring meals out to diners. Customers order and pay via touchscreen, then their request is sent to the kitchen where a cooking machine heats up the buns and patties. When it’s ready, a robot ‘waiter’ brings out their takeout bag.
‘This is the first time I’ve actually seen such robots, so they are really amazing and fun,’ Shin Hyun Soo, an office worker at No Brand in Seoul for the first time, told the AP.
Human workers add toppings to the burgers and wrap them up in takeout bags before passing them over to yellow-and-black serving robots, which have been compared to Minions.
Also in Korea, the Italian restaurant chain Mad for Garlic is using serving robots even for sit-down customers. Using 3D space mapping and other technology, the electronic ‘waiter,’ known as Aglio Kim, navigates between tables with up to five orders. Mad for Garlic manager Lee Young-ho said kids especially like the robots, which can carry up to 66lbs in their trays.
These catering robots look nothing like their human counterparts – in fact they are nothing more than glorified food trolleys so using our thumb rule from the movies, mankind is safe from imminent takeover but clearly Korean hospitality sector workers’ jobs are not.
And right there is the dichotomy – replacement by stealth. Remote-controlled robotic waiters and waitresses don’t need to be paid, they don’t go on strike and they don’t spread disease so it’s a sure bet their army is already on the march.
But there may be more redundancies on the way as well. Have you noticed how AI designers have an inability to use words of more than one syllable? So ‘robot’ has become ‘bot’ and ‘android’ simply ‘droid? Well, guys, if you continue to build machines ultimately smarter than yourselves you ‘rons may find yourself surplus to requirements too – that’s ‘moron’ to us polysyllabic humans”!