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COVID 19 – Possible tax implications iii (presumptive taxes)

The Corona Virus continues to cause harm to our economy and the government has since come up with initiatives that aims at assisting those who are affected by the virus.

Initiatives such as wage subsidies, tax concessions and loan guarantees have been put forward. A big debate has risen on how the informal sector is going to be assisted by the government as they are among the hard hit by the virus as their businesses have been closed and it is not easy to identify them and they also don’t have proof of how much income they make and the expenses they incur.

Botswana Unified Revenue Service (BURS) has made it clear that they will only assist those who have adequate records and are registered with them with the interventions that are proposed by government as they have been paying their share of tax. For as far back as 2009, BURS has been citing presumptive taxes in their reports as one of the ways they want to increase their tax base.

We haven’t heard reasons why this has been difficult to implement or enact but this opportunity presents BURS with a good case for the Ministry of Finance and Economic Development through the Tax Policy Unit to introduce presumptive taxes in the country.

Worldwide presumptive taxes have been used to bring on board the Hard To Tax (HTT) into the tax collection net so they also contribute to government coffers. These are said to be presumptive because they are not normally directly linked to the tax base (income or transaction) but based on different aspects such as the income generating machinery or the value of the operating license if such businesses have licenses.

For example, informal landlords in areas such as Tlokweng can be taxed based on the number of housing units they own and taxis on the number of vehicles owned. Each unit will be allocated a certain amount that it can generate and taxed on that.

Though it is possible that at times this income can be higher than the normal income in most cases the tax is minimal and lower than the tax paid under normal circumstances. In other countries such as Kenya tax collection for landlords are linked to utilities such as power and electricity such that when they have not paid tax these utilities are disconnected until tax is paid.

For other businesses the license is renewed after payment for tax has been made and proof of such is presented. With harmonization of various systems at the government enclave now in place it will be easy for tracking of these businesses.

Though licensing has been sighted as one of disadvantages in ease of doing business in the past and the President ruled that some businesses can be conducted without licenses, it is important that we have licensing in place as a tracking and data collection mechanism.  The most important issue in improving ease of doing businesses will be perfecting of the process to ensure it is not cumbersome and a hinderance to business.

The licensing will be beneficial to both the government and businesses in times like these. Apart from increasing the revenue base for BURS presumptive taxes will ease administration in relation to such businesses as there will be no need to audit them, spend lot of resources chasing them and assign managers of such accounts.

This will result in massive savings for BURS that can be channeled towards other operational issues. Furthermore, they will also reduce compliance costs for taxpayers in this category as they won’t need accountants to prepare financial statements for them or prepare tax returns.

Hopefully, the available data at BURS and the successful bidder for the tax gap tender will be able to assist BURS in identifying the make-up of the informal sector and further provide an appropriate mechanism that will help them pay tax with ease and be easily identifiable by government.

For though the sector may want to be invisible and keep their infamous tag the HTT, it is in times like these that they wish they were traceable, it’s a carrot and stick affair but in the end, everyone is a winner.

BURS get their share and they get to be identified and benefit from government intervention in the cold, dark days we find ourselves in. For now when some bite the government cherry all they will get is that heart wrenching response “I NEVER KNEW YOU…….”.

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Export Processing Zones: How to Get SEZA to Sizzle

23rd September 2020
Export Processing Zone (EPZ) factory in Kenya

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.

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Egypt Bagged Again

23rd September 2020

… 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.

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23rd September 2020

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    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”!

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