Prevailing Securities gives BURS an ultimatum
Prevailing Securities which is currently placed under Judicial Management, has through its attorneys written to the Commissioner General of Botswana Unified Revenue Services (BURS) on July 7th 2020, seeking that the P82 million tax assessment for both VAT and Income they were slapped with in early 2019 be re-visited as agreed failure of which they will approach the High Court for review.
In a letter penned by Serole and Partners, Shadrack Baaitse who is the owner of Prevailing Securities said the Income Tax Assessment according to BURS letter dated 30th January 2019, was based on all deposits held at First National Bank, Bank Gaborone and Standard Chartered Bank in the company accounts.
He noted that these deposits were treated as “income” by BURS and business “turnover” as they were coming from the “company customers”. Baaitse said the explanation given for treating the income as turnover was that the company had failed to provide records demanded on numerous occasions.
“It is to be noted that, the company has always provided documents needed by your office,’’ said Baaitse. “Client instructs us that upon receipt of notice of assessment in the total sum of P81, 766, 882, 46 (VAT and Income Tax inclusive) it submitted a detailed list and/or account of matters which were not taken into consideration when they ought to have been at the time of assessment.’’
Serole and Partners write that on numerous occasions, both telephonically and in person through its Directors and Judicial Manager, they attended to BURS to request for reassessment.
“You have on a number of occasions promised to attend to the reassessment on the submitted information but all has been futile,” the lawyers stated.
The lawyers said that in their opinion the client’s request and demand is not unreasonable as it makes it difficult for the client to lodge a substantive objection without a reassessment as promised, which would incorporate the submitted information and reflect how the amount claimed was arrived at.
“Interestingly, despite demands from Client to do a reassessment you have proceeded to attach and seize client’s monies from its creditor’s property and even failed to pay employees’ salaries. Your acts have as a result crippled business to an extent that Client has not been running,” they said.
The attorneys alleged that further to demonstrate mala fide, the tax master, contrary to the judicial management orders, deliberately continued with his acts aforementioned.
Prevailing Securities once again demanded for the reassessment as agreed and as of today (July 16), BURS has not responded to their letter. “It is our intention to be tax- compliant and we have no intention of not paying what is due to the taxman. However, it should be noted that, the VAT and Income Tax Assessment by yourself makes erroneous assumption.
“First it fails to recognize inter- banking transfers by the company by treating such transfers as payments and income from customers, when in fact and in truth, this is not income or turnover.
“Secondly, the assessment treats the so called income as net profit as well as gross profit for levying tax, without taking into account expenses.
“Thirdly, the assessment has included loans from financial institutions, obtained by the company for purposes of running the business as income or turn-over from customers,” the lawyers contended.
According to the letter, these are some of the errors made by BURS, which have been previously brought to their attention. “You have chosen to deliberately ignore such concerns and proceed to impose extreme penalties on amounts done and payable resulting in the collapse of the business.
“That, you acted mala fide is evident from letters and execution. Client received Notice of Assessment on the 30th January 2019 without being provided with the findings of the Assessment. The next day, 31st January 2019, you attended to execute our client’s property” they said.
The letter also provide that on the objection, client filed with BURS, the difference between what is owed is less than P4, 000.00 as opposed to their P80, 000.00. On account of the above, client urgently requires a reassessment of both the Income Tax and VAT.
“Given the history of the communication between the parties should client not hear from you by the 15th July 2020, on its request for reassessment client will approach the High Court for review and set aside of your assessment,” read the letter.
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Nigerians, Zimbabweans apply for Chema Chema Fund
Fronting activities, where locals are used as a front for foreign-owned businesses, have been a long-standing issue in Botswana. These activities not only undermine the government’s efforts to promote local businesses but also deprive Batswana of opportunities for economic empowerment, officials say. The Ministry of Trade and Industry has warned of heavy penalties for those involved in fronting activities especially in relation to the latest popular government initiative dubbed Chema Chema.
According to the Ministry, the Industrial Development Act of 2019 clearly outlines the consequences of engaging in fronting activities. The fines of up to P50,000 for first-time offenders and P20,000 plus a two-year jail term for repeat offenders send a strong message that the government is serious about cracking down on this illegal practice. These penalties are meant to deter individuals from participating in fronting activities and to protect the integrity of local industries.
“It is disheartening to hear reports of collaboration between foreigners and locals to exploit government initiatives such as the Chema Chema Fund. This fund, administered by CEDA and LEA, is meant to support informal traders and low-income earners in Botswana. However, when fronting activities come into play, the intended beneficiaries are sidelined, and the funds are misused for personal gain.” It has been discovered that foreign nationals predominantly of Zimbabwean and Nigerian origin use unsuspecting Batswana to attempt to access the Chema Chema Fund. It is understood that they approach these Batswana under the guise of drafting business plans for them or simply coming up with ‘bankable business ideas that qualify for Chema Chema.’
Observers say the Chema Chema Fund has the potential to uplift the lives of many Batswana who are struggling to make ends meet. They argue that it is crucial that these funds are used for their intended purpose and not siphoned off through illegal activities such as fronting. The Ministry says the warning it issued serves as a reminder to all stakeholders involved in the administration of these funds to ensure transparency and accountability in their disbursement.
One local commentator said it is important to highlight the impact of fronting activities on the local economy and the livelihoods of Batswana. He said by using locals as a front for foreign-owned businesses, opportunities for local entrepreneurs are stifled, and the economic empowerment of Batswana is hindered. The Ministry’s warning of heavy penalties is a call to action for all stakeholders to work together to eliminate fronting activities and promote a level playing field for local businesses.
Meanwhile, the Ministry of Trade and Industry’s warning of heavy penalties for fronting activities is a necessary step to protect the integrity of local industries and promote economic empowerment for Batswana. “It is imperative that all stakeholders comply with regulations and work towards a transparent and accountable business environment. By upholding the law and cracking down on illegal activities, we can ensure a fair and prosperous future for all Batswana.”
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Merck Foundation and African First Ladies mark World Health Day 2024
Merck Foundation, the philanthropic arm of Merck KGaA Germany marks “World Health Day” 2024 together with Africa’s First Ladies who are also Ambassadors of MerckFoundation “More Than a Mother” Campaign through their Scholarship and Capacity Building Program. Senator, Dr. Rasha Kelej, CEO of Merck Foundation emphasized, “At Merck Foundation, we mark World Health Day every single day of the year over the past 12 years, by building healthcare capacity and transforming patient care across Africa, Asia and beyond.
I am proud to share that Merck Foundation has provided over 1740 scholarships to aspiring young doctors from 52 countries, in 44 critical and underserved medical specialties such as Oncology, Diabetes, Preventative Cardiovascular Medicine, Endocrinology, Sexual and Reproductive Medicine, Acute Medicine, Respiratory Medicine, Embryology & Fertility specialty, Gastroenterology, Dermatology, Psychiatry, Emergency and Resuscitation Medicine, Critical Care, Pediatric Emergency Medicine, Neonatal Medicine, Advanced Surgical Practice, Pain Management, General Surgery, Clinical Microbiology and infectious diseases, Internal Medicine, Trauma & Orthopedics, Neurosurgery, Neurology, Cardiology, Stroke Medicine, Care of the Older Person, Family Medicine, Pediatrics and Child Health, Obesity & Weight Management, Women’s Health, Biotechnology in ART and many more”.
As per the available data, Africa has only 34.6% of the required doctors, nurses, and midwives. It is projected that by 2030, Africa would need additional 6.1 million doctors, nurses, and midwives*. “For Example, before the start of the Merck Foundation programs in 2012; there was not a single Oncologist, Fertility or Reproductive care specialists, Diabetologist, Respiratory or ICU specialist in many countries such as The Gambia, Liberia, Sierra Leone, Central African Republic, Guinea, Burundi, Niger, Chad, Ethiopia, Namibia among others. We are certainly creating historic legacy in Africa, and also beyond. Together with our partners like Africa’s First Ladies, Ministries of Health, Gender, Education and Communication, we are impacting the lives of people in the most disadvantaged communities in Africa and beyond.”, added Senator Dr. Kelej. Merck Foundation works closely with their Ambassadors, the African First Ladies and local partners such as; Ministries of Health, Education, Information & Communication, Gender, Academia, Research Institutions, Media and Art in building healthcare capacity and addressing health, social & economic challenges in developing countries and under-served communities. “I strongly believe that training healthcare providers and building professional healthcare capacity is the right strategy to improve access to equitable and quality at health care in Africa.
Therefore, I am happy to announce the Call for Applications for 2024 Scholarships for young doctors with special focus on female doctors for our online one-year diploma and two year master degree in 44 critical and underserved medical specialties, which includes both Online Diploma programs and On-Site Fellowship and clinical training programs. The applications are invited through the Office of our Ambassadors and long-term partners, The First Ladies of Africa and Ministry of Health of each country.” shared Dr . Kelej. “Our aim is to improve the overall health and wellbeing of people by building healthcare capacity across Africa, Asia and other developing countries. We are strongly committed to transforming patientcare landscape through our scholarships program”, concluded Senator Kelej.
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Interpol fugitive escapes from Botswana
John Isaak Ndovi, a Tanzanian national embroiled in controversy and pursued under a red notice by the International Criminal Police Organization (Interpol), has mysteriously vanished, bypassing a scheduled bail hearing at the Extension 2 Magistrate Court in Gaborone. Previously apprehended by Botswana law enforcement at the Tlokweng border post several months earlier, his escape has ignited serious concerns.
Accused of pilfering assets worth in excess of P1 million, an amount translating to roughly 30,000 Omani Riyals, Ndovi has become a figure of paramount interest, especially to the authorities in the Sultanate of Oman, nestled in the far reaches of Asia.
The unsettling news of his disappearance surfaced following his failure to present himself at the Extension 2 Magistrate Court the preceding week. Speculation abounds that Ndovi may have sought refuge in South Africa in a bid to elude capture, prompting a widespread mobilization of law enforcement agencies to ascertain his current location.
In an official communiqué, Detective Senior Assistant Police Commissioner Selebatso Mokgosi of Interpol Gaborone disclosed Ndovi’s apprehension last September at the Tlokweng border, a capture made possible through the vigilant issuance of the Interpol red notice.
At 36, Ndovi is implicated in a case of alleged home invasion in Oman. Despite the non-existence of an extradition treaty between Botswana and Oman, Nomsa Moatswi, the Director of the Directorate of Public Prosecution (DPP), emphasized that the lack of formal extradition agreements does not hinder her office’s ability to entertain extradition requests. She highlighted the adoption of international cooperation norms, advocating for collaboration through the lenses of international comity and reciprocity.
Moatswi disclosed the intensified effort by law enforcement to locate Ndovi following his no-show in court, and pointed to Botswana’s track record of extraditing two international fugitives from France and Zimbabwe in the previous year as evidence of the country’s relentless pursuit of legal integrity.
When probed about the potential implications of Ndovi’s case on Botswana’s forthcoming evaluation by the Financial Action Task Force (FATF), Moatswi reserved her speculations. She acknowledged the criticality of steering clear of blacklisting, suggesting that this singular case is unlikely to feature prominently in the FATF’s assessment criteria.