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UDC calls for sombre intervention against COVID-19 by Government

Moeti Mohwasa

The Umbrella for Democratic Change (UDC) has articulated that Government needs to stand on its toes in order to fully combat the COVID-19 pandemic.

In a statement released by the party’s communications unit, UDC has said that it is common knowledge that the capacity of the health system in Botswana is quite limited, emphasising that this therefore means it will not be adequate in the face of a full COVID-19 attack similar to that experienced by other countries.

UDC urged that it is crucial that the COVID-19 strategy team ensures that the capacity that resides in the private health sector and Batswana in the diaspora are mobilised and used maximally in the fight against COVID-19.

“Private health practitioners and their clinics should be put on alert. They should be made part of the equation. Health Professionals and others in the diaspora should be mobilised and engaged to the extent possible,” said the party.

In accentuating this, the UDC emphasised that the health workers who are prepared to come home and join the fight on the ground should be fully assisted by the government. “Modern communication technology should be used to make use of the knowledge, expertise and experience of those who cannot be physically here but can avail their time to help with planning, execution and analysis from where they are,” they party contended.

UDC stressed that it is evident that the entire COVID-19 health and economic response requires better planning than what has been thus far, so that stakeholders know their role in the response to the pandemic.

On the 17th April Ministry of Health and Wellness had issued that in an effort to respond to the COVID-19 pandemic they will effect Monday 20th April they will begin community testing for COVID-19 in five districts being the Greater Gaborone, Greater Francistown, Gantsi, Ngami and Chobe.

However, this was later on narrowed to targeted community testing in the form of making a follow up on contacts that have already tested positive for COVID-19.In response to this, the UDC said: “we are concerned that the targeted community based Covid-19 testing that was scheduled to commence this week based on a random sample of 20, 000 has been postponed, ostensibly to focus on contact tracing.”

The UDC labelled this as yet another failure to plan by government, arguing that, “the Nation cannot afford this.” “Community testing and contact tracing are both absolutely crucial for informing the COVID-19 containment strategy and should run concurrently rather that sequentially. The delay in community testing means that locating the geographical footprint of the pandemic will be delayed, at a high cost to the nation in terms of both the spread of the disease and the economic costs.”

They further recommended that priority to testing must go to all health workers and social workers, national and local leaders dealing with the permits, including the police and the army, those going back to work and teachers.

Moreover, the UDC stressed that in the planning for the COVID-19 responses the government must recognise that it is still necessary to make sure that other diseases and health conditions continue to be attended to.

Diseases like cancer, acute trauma, tuberculosis, malaria and health conditions such as hypertension and diabetes should not be under-resourced as this could make COVID-19 more lethal, the opposition party contended. The UDC also urged the government to make damning effort in ensuring that the frontline workers are provided with Personal Protective Clothing (PPE’s) including facial masks.

“The experience of other countries shows that the mandatory wearing of facial barriers/masks in public reduces the spread of Covid-19. In fact it even controls the spread of ordinary flu,” they said.
UDC said they highly recommend the use of face masks as a containment effort as the virus is new and is still unknown therefore it is prudent to prioritise prevention.

“The pursuit of a strategy of developing herd immunity, whilst well founded in science, has produced tragic results in the UK. Head immunity is a well-known epidemiological phenomenon. It has been used to manage diseases like measles. However not enough is known about Covid-19. Botswana cannot risk a bold pursuit of herd immunity.”

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UDC declares war on Skelemani

3rd August 2020
Skelemani

Leader of Opposition’s (LOO) Dumelang Saleshando has said the Speaker of the National Assembly, Phandu Skelemani risks losing the moral authority to preside over the house due to the manner in which he handles parliament proceedings.

This week parliament made an unprecedented decision to suspend Saleshando, from parliament for a period of a week. Saleshando is also Member of Parliament for Maun West. Subsequent to Saleshando’s suspension, opposition Members of Parliament boycotted parliamentary proceedings, save for Alliance for Progressives’ Wynter Mmolotsi.

Saleshando was suspended for refusing to withdraw his statement in which he implicated President Mokgweetsi Masisi’s sister in a tender alleged to have been awarded corruptly. While Skelemani has relatively enjoyed respect from opposition parties since the beginning of the 12th parliament, it appears the Tuesday events will turn things around.

“The speaker is risking losing the moral authority to precede over the house. Because we don’t have the numbers but we can’t participate in a match,” Saleshando told media on Wednesday.
Saleshando who has since written a letter to the speaker to outline the opposition’s displeasures, pointed out that the Speaker has on many occasions spoke to members of opposition in a disrespectful manner.

One example, according to the Leader of Opposition was during the State of Emergency when the speaker ordered that Oneetse Ramogapi, Member of Parliament for Palapye, to sit down “because matters being discussed are too complex for him to comment on.” Saleshando indicated that some of the jabs being thrown at them undermine themselves as MPs because of use of condescending expressions.

Saleshando further emphasised that his suspension from parliament was not an independent decision made by the Speaker. He also pointed out that his suspension was staged hence Masisi was present on the day. Former BDP MP Tshekedi Khama also expressed his displeasure, further indicating that they stand in solidarity with the Umbrella for Democratic Change (UDC).

“We already knew that Saleshando was going to be suspended on that day. Skelemani must understand one thing, that he is not the speaker of the Botswana Democratic Party but that of the national assembly,” said Khama.  “We are totally disappointed by yesterday’s events, this can only mean one thing. That democracy in Botswana has come to pass.

Secondly we have heard that the three institutions the third being parliament are supposed to be independent but we have seen clearly that Speaker Skelemani is wearing a BDP cap and not his wig.” Moreover, they further indicated that they have observed a very disturbing trend by the Speaker to want to turn parliament into a court of law.

They elaborated that on numerous occasions the Speaker demands that the MPs prove opinions with facts which they point out as unfair on them. “As members pf parliament our role is to raise a suspicion based on what we are observing. We are not supposed to be demanded to prove evidence. That is the duty of other agencies, maybe if we could call the DCEC to explain to Skelemani what constitutes corruption maybe it can be something,” said Ngami MP, Carter Hikuama.

The opposition members said their main concern with the way the Speaker conducts his day to day business is that he might end up losing the authority to control the parliament proceedings altogether. Furthermore, they indicated that the speaker should not stand in the way of attempts by MPs of the opposition to hold the President accountable with fear or favour. Mahalapye East Member of Parliament Yandani Boko said it is surprising how the speaker has elevated himself to the role of a judge in parliament.

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IFSC fiscal framework here to stay – BITC

3rd August 2020
Keletsositse Olebile

Botswana Investment & Trade Centre (BITC), the country‘s intergraded trade & investment promotion agency has reiterated Botswana’s position on the International Finance Services Centre (IFSC), a tax incentive provision for accredited companies.

Speaking at a media engagement session on Tuesday BITC Chief Executive Officer, Keletsositse Olebile underscored that the IFSC is not a breeding vehicle of illicit capital flows but a provision purely crafted as an investment wooing instrument which already has tangible and significant benefits to the country’s economy.

Olebile explained that the provision is a mechanism to attract foreign investment, channel capital into local investment projects, provide additional opportunities for local investors and create sustainable employment opportunities for suitable and qualified Batswana.

Furthermore the BITC Chief added that the IFSC fiscal framework plays a role in the enhancement of skills base for the Botswana workforce, fostering of innovation and sophistication in financial and business services and enhancement of Botswana’s already excellent reputation in the international financial and business community as well as generate tax revenue for Botswana.

BENEFITS TO ACCREDITED COMPANIES

Whilst most companies pay Corporate Tax at 22%, IFSC companies are generally taxed at 15%, Eighth Schedule to Income Tax Act. When deliberating on the provision leading tax consultant Jonathan Hore of Aupracon said because IFSC companies predominantly deal with non-residents, they are taxed 15 % on nonresident proceeds, while paying the normal 22 % for Botswana resident’s proceeds.

“This means that the tax computation of an IFSC company will most likely have two columns, to separate the 15% income from that taxable at 22%, IFSCs can, just like any other taxpayer, also claim withholding tax credits for tax suffered in foreign countries,“ he said. Hore added that such credits cannot exceed the Botswana tax on the foreign income, that is to say BURS cannot refund a taxpayer because the taxpayer paid tax offshore.

An IFSC entity which invests in an offshore entity to the extent of at least 25 % is not taxed on the dividends it earns from such investments. The investments are called Qualifying Foreign Participation (QFP) and are exempt in terms of the Second Schedule to the Income Tax Act, which states that, any dividends received by international financial services Centre Company in respect of a qualifying foreign participation as defined under section 2; shall be exempt from tax to the extent indicated.

The act defines Qualifying Foreign Participation (QFP) as participation held by an international financial services centre company in a company which is not resident in Botswana, where the international financial services centre company controls either directly or indirectly, alone or with connected persons, 25 per cent or more of the share capital including 25 per cent or more of the voting rights of the nonresident company.

IFSC companies also enjoy zero Capital Gains Tax (CGT). CGT is levied on the capital appreciation of any specified assets such as shares, immovable properties etc. Any person who disposes shares must pay the CGT.

However, IFSC companies do not suffer CGT when they dispose of shares held in a Qualifying Foreign Participation, i.e. at least 25% shareholding in nonresident subsidiaries. Secondly, the shareholders in an IFSC company are exempt from CGT.

WHAT ARE BOTSWANA’S BENEFITS?

Jonathan Hore noted that IFSC is an incentive which attracts FDI as foreign dividends are not taxed – “CGT exemption means that investors can set-up holding companies in Botswana and when they want to exit, they don’t have to worry about CGT.

Mauritius doesn’t have CGT at all and this Botswana incentive can only be compared to Mauritius. Most SADC states have CGT for most investors. Botswana is therefore ahead of the pack, together with Mauritius,” he said.

The renowned Tax consultant explained that this helps IFSC entities to obtain the best of non-resident consultants and investors. “Dealing with IFSCs is more business-friendlier as compared with dealing with any other BW entity, which deducts WHT from payments due to non-residents.”

BITC CEO noted that as a consequence of the framework insisting on a physical presence (Office) as opposed to brass plating, indirectly this contributes to business tourism in the form of shuttle services, lodging, dining fees when non-resident directors visit their head offices.

PREVIOUS CONCERNS

Previously various global economic and financial commentators such as the International Monetary Fund (IMF), Organisation for Economic Cooperation & Development (OECD) expressed concerns over Botswana’s tax incentives noting a possibility of the provisions being used as window of tax invasion, raking in all returns, eroding national tax bases and compromising domestic resources mobilization systems.

OEDC observed that tax exemptions such as IFSC fiscal framework if not tightly managed have little impact on investment attraction but only cripple the country‘s revenue collection vehicles.
“Under pressure to offer internationally-competitive tax environments, developing countries offer generous tax breaks that undermine their domestic resource mobilization efforts with little demonstrable benefit in terms of increased investment,” said OECD in previous publications in 2018.

“There is limited information on the way in which Botswana’s IFSC is used for illicit and criminal practice, but according to a 2017 evaluation carried out by Eastern and Southern Africa Anti-Money Laundering Group, without developed anti-money laundering and counter-terrorist financing regime the country is at risk of being used as a conduit,” noted the Tax Justice Network in 2017.

THE FRAMEWORK & SUCCESFULLY DUSTING OFF THE ‘TAX HAVEN’ TAG

Botswana as since refined the IFSC fiscal framework in a bid to tighten compliance with international practices. The investment promotion boss who championed Botswana‘s campaign against the tax haven tag in 2014 noted that Botswana has since joined the Inclusive Framework by OECD and G20.

Furthermore Botswana has since complied with resolutions of OECD Forum on Harmful Tax Practices (FHTP) by subscribing to Base Erosion and Profit Shifting Standard (BEPS), Substantive Presence, Tax Information Exchange agreements which are requested from time to time.

Olebile reiterated that Botswana is not a tax haven, noting that in conjunction with respective industries regulatory and compliance authorities such as Bank of Botswana, NBFIRA , BURS , IFSC accredited companies are regularly zoomed into check if they living up to promises and comply with the law.

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Masisi misses critical BDP meet

3rd August 2020
President Masisi

President Mokgweetsi Masisi has this week left a number of Botswana Democratic Party (BDP) legislators disappointed after not gracing the party’s parliamentary caucus, where they expected to slap him with a litany of concerns they encounter within the party.

The Tuesday meeting was the first BDP caucus meeting since the country went into lockdown in March this year. Chronicles of activities within the party leading to this week’s meeting necessitated Masisi to be present at Boipuso Hall held meeting, posit some MPs. Some legislators have been unhappy with how the party leadership and the party in general conduct its business in relation with the backbenchers.

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