BURS loses P80 million claim against Prevailing Securities
Botswana Unified Revenue Services (BURS) has lost an P80 million tax claim against Prevailing Securities (Pty) Ltd, a company owned by Shadrack Baaitse, an ally of former President Lt Gen Ian Khama.
Lobatse High Court Judge Michael Leburu this week ruled in favour of Danny Julius Guduli in his capacity as the Judicial Manager of Prevailing Securities (Pty) Ltd against Botswana Unified Revenue Services (BURS) and its Commissioner General.
On the 17th August 2018, the company [Prevailing Securities] was selected by the BURS for Tax Investigations. The Managing Director, Baaitse, attended an interview called by BURS, duly represented by Kaone Molapo, Daphney Baka and Samuel Mokelwane. The said interview was in respect to the companys tax liability.
On the 30th January 2019, the respondent [BURS] issued two notices of assessments. The first one related to Value Added Tax (VAT) and the other to the Income Tax Assessment. In respect to the VAT Assessment, the Respondents issued a total additional assessment of P7, 179, 977.92 for the period January 2013 to December 2017. It further imposed a penalty of 200%, thus bringing the total penalty charge to P14, 359, 955.85.
In the Notice of Assessment, BURS state among others that the company had understated output tax, as evidenced by the Company bank statement, which had indicated that the company had received more income than what was declared as turnover in the submitted returns. As for input tax, the Respondents stated that the Company had not provided tax invoices.
According to the Applicant, the company had provided all the requisite documents to the Respondents.
The VAT Assessment, according to Danny Julius Guduli, did not include some of the payments made to the Respondents by the Company, for instance, the sum of P119, 952.83 paid on the 1st March 2014 was not reflected on the assessment schedule.
Furthermore, it was averred that the Respondent levied VAT on unpaid invoices and this subjected the company to an unreasonable tax burden for the sum of money received.
The applicant denies that the company understated its income. In amplification, it contended that the company received two types of income, namely income derived from its ordinary course of business and that the other income came from non- income activities.
These non- income activities were not related to any contractual income from its different customers. The non- income activities included reversed instalments, dishonoured cheques, reversed stop- orders, intercompany fund transfers, temporary loans, insurance claims, funds deposited from other bank accounts of the company to meet expenses and rejected salaries from employees bank accounts.
For services rendered, the company was paid in arrears by its customers and not all customers paid for services rendered on time and in full. According to the Applicant, the Respondents levied tax for services rendered, even before the company was actually by its customers.
It is the applicants case that the inclusion of non- income activities in the assessment is not only wrongful but irrational and that it amounts to abuse of authority.
With respect to Income Tax Assessment, the Applicant avers that the Respondent erroneously treated all deposits in the company bank accounts as income. The total amount levied as outstanding assessment was P56 703 834.34 which included a 200% penalty.
The total credits from all the four banks stood at P72, 928, 094.61. A total of P22, 068, 250.50 was from non- income activities. The total income before the expenses and running costs, from the four banks was P50, 859, 844.11.
According to the Respondents, this conduct by the company was determined to be intentionally made so as to cheat the fiscus and that this imposition of administrative penalty, was in terms of Section 118 (1) (a) (b) and (c) of the Income Tax Act.
Under the Judicial Review, the documents filed of record will show that the audits conducted against the Applicant covered the periods of 2012- 2018. Information in the Bank statements was wrongfully extrapolated to deem receipt of income when such was not so.
According to the applicant, a number of contracts either did not exist or had expired for the periods under assessment. These included the University of Botswana, BAMB, and BPC contracts, which had expired in 2016; BMC contract which expired in the early part of 2018 and BCL in 2016.
High Court Judge Michael Leburu wrote: In my view, while banks statements may show the amount in the bank at any given point, they dont indicate the companys profitability, the various taxes collected nor the deductions that a tax payer would be entitled to.
According to the judgement a bank is thus not necessarily a reflection of the profitability or financial performance of a company and cannot always objectively be used to determine the profitability of company nor its VAT liability, given the allowable deductions permitted under the Income Tax and Value Added tax legislations.
The expenses associated with the company operations are by law not part of its taxable income and any re-assessment should have not ignored this fact.
For all the above reasons, I am satisfied that the Applicant has made out a case for review and has succeeded in showing that the decision of the Commissioner General to include non- income receipts, as part of its taxable income, and receipts that did not constitute a taxable supply was irrational and unreasonable.
Consequently, the re-assessment by the Respondent is hereby set aside, including the consequences penalties imposed. It is accordingly ordered that the respondents additional VAT assessment of P7, 179, 977.92 against Prevailing Securities (Pty) Ltd for the period January 2013 to December 2017 be reviewed and set aside; and that the Respondents imposed penalties of 200% against Prevailing Securities (Pty) Ltd in the sum of P14, 359, 955.85 be reviewed and set aside.
Again the respondents Income Tax Assessment of P56, 703, 834.34 inclusive of penalty of 200% against Prevailing Securities (Pty) Ltd be reviewed and set aside.
The respondents were also ordered to carry out a re- assessment of the companys tax liability (Income Tax and Value Added Tax) within 60 days from the date hereof and they shall bear the costs of this application, including that of the counsel. The judgement was delivered by electronic mail on the 27th April, 2021.
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19 Bokamoso Private Hospital nurses graduate at Lenmed Nursing College
The graduation of 19 nurses from Bokamoso Private Hospital at Lenmed Nursing College marks a significant milestone in their careers. These nurses have successfully completed various short learning programs, including Adult Intensive Care Unit, Emergency Nursing Care, Anaesthetic & Recovery Room Nursing, Anaesthetic Nursing, and Recovery Room Nursing. The ceremony, held in Gaborone, was a testament to their hard work and dedication.
Lenmed Nursing College, a renowned healthcare group with a presence in South Africa, Botswana, Mozambique, and Ghana, has been instrumental in providing quality education and training to healthcare professionals. The Group Head of Operations, Jayesh Parshotam, emphasized the importance of upskilling nurses, who are at the forefront of healthcare systems. He also expressed his appreciation for the partnerships with Bokamoso Private Hospital, the Ministry of Health, and various health training institutes in Botswana.
Dr. Morrison Sinvula, a consultant from the Ministry of Health, commended Lenmed Health and Lenmed Nursing College for their commitment to the education and training of these exceptional nurses. He acknowledged their guidance, mentorship, and support in shaping the nurses’ careers and ensuring their success. Dr. Sinvula also reminded the graduates that education does not end here, as the field of healthcare is constantly evolving. He encouraged them to remain committed to lifelong learning and professional development, embracing new technologies and staying updated with the latest medical advancements.
Dr. Gontle Moleele, the Superintendent of Bokamoso Private Hospital, expressed her excitement and pride in the graduating class of 2023. She acknowledged the sacrifices made by these individuals, who have families and responsibilities, to ensure their graduation. Dr. Moleele also thanked Lenmed Nursing College for providing this opportunity to the hospital’s nurses, as it will contribute to the growth of the hospital.
The certificate recipients from Bokamoso Private Hospital were recognized for their outstanding achievements in their respective programs. Those who received the Cum Laude distinction in the Adult Intensive Care Unit program were Elton Keatlholwetse, Lebogang Kgokgonyane, Galaletsang Melamu, Pinkie Mokgosi, Ofentse Seboletswe, Gorata Basupi, Bareng Mosala, and Justice Senyarelo. In the Emergency Nursing Care program, Atlanang Moilwa, Bakwena Moilwa, Nathan Nhiwathiwa, Mogakolodi Lesarwe, Modisaotsile Thomas, and Lorato Matenje received the Cum Laude distinction. Kelebogile Dubula and Gaolatlhe Sentshwaraganye achieved Cum Laude in the Anaesthetic & Recovery Room Nursing program, while Keletso Basele excelled in the Anaesthetic Nursing program. Mompoloki Mokwaledi received recognition for completing the Recovery Room Nursing program.
In conclusion, the graduation of these 19 nurses from Bokamoso Private Hospital at Lenmed Nursing College is a testament to their dedication and commitment to their profession. They have successfully completed various short learning programs, equipping them with the necessary skills and knowledge to excel in their respective fields. The collaboration between Lenmed Nursing College, Bokamoso Private Hospital, and the Ministry of Health has played a crucial role in their success. As they embark on their careers, these nurses are encouraged to continue their professional development and embrace new advancements in healthcare.
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BNF secures 15 constituencies in UDC coalition, wants more
The Botswana National Front (BNF) has recently announced that they have already secured 15 constituencies in the Umbrella for Democratic Change (UDC) coalition, despite ongoing negotiations. This revelation comes as the BNF expresses its dissatisfaction with the current government and its leadership.
The UDC, which is comprised of the BNF, Botswana Peoples Party (BPP), Alliance for Progressives (AP), and Botswana Patriotic Front (BPF), is preparing for the upcoming General Elections. However, the negotiations to allocate constituencies among the involved parties are still underway. Despite this, the BNF Chairman, Patrick Molotsi, confidently stated that they have already acquired 15 constituencies and are expecting to add more to their tally.
Molotsi’s statement reflects the BNF’s long-standing presence in many constituencies across Botswana. With a strong foothold in these areas, it is only natural for the BNF to seek an increase in the number of constituencies they represent. This move not only strengthens their position within the UDC coalition but also demonstrates their commitment to serving the interests of the people.
In a press conference, BNF Secretary General, Ketlhafile Motshegwa, expressed his discontent with the current government leadership. He criticized the ruling Botswana Democratic Party (BDP) for what he perceives as a disregard for the well-being of the Batswana people. Motshegwa highlighted issues such as high unemployment rates and shortages of essential medicines as evidence of the government’s failure to address the needs of its citizens.
The BNF’s dissatisfaction with the current government is a reflection of the growing discontent among the population. The Batswana people are increasingly frustrated with the lack of progress and the failure to address pressing issues. The BNF’s assertion that the government is playing with the lives of its citizens resonates with many who feel neglected and unheard.
The BNF’s acquisition of 15 constituencies, even before the negotiations have concluded, is a testament to their popularity and support among the people. It is a clear indication that the Batswana people are ready for change and are looking to the BNF to provide the leadership they desire.
As the negotiations continue, it is crucial for all parties involved to prioritize the interests of the people. The allocation of constituencies should be done in a fair and transparent manner, ensuring that the voices of all citizens are represented. The BNF’s success in securing constituencies should serve as a reminder to the other parties of the need to listen to the concerns and aspirations of the people they aim to represent.
In conclusion, the BNF’s acquisition of 15 constituencies, despite ongoing negotiations, highlights their strong presence and support among the Batswana people. Their dissatisfaction with the current government leadership reflects the growing discontent in the country. As the UDC coalition prepares for the upcoming General Elections, it is crucial for all parties to prioritize the needs and aspirations of the people. The BNF’s success should serve as a reminder of the importance of listening to the voices of the citizens and working towards a better future for Botswana.
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Children’s summit to discuss funding of NGOS
One of the key issues that will be discussed by the Childrens’ Summit, which will be hosted by Childline Botswana Trust on 28th – 30th November in Gaborone, will be the topical issue of financing and strengthening of civil society organizations.
A statement from Childline Botswana indicates that the summit will adopt a road map for resourcing the children’s agenda by funding organizations. It will also cover issues relating to child welfare and protection; aimed at mobilizing governments to further strengthen Child Helplines; as well as sharing of emerging technologies to enhance the protection of Children and promotion of their rights.
According to Gaone Chepete, Communications Officer at Childline Botswana, the overall objective of the summit is to provide a platform for dialogue and engagement towards promoting practices and policies that fulfil children’s rights and welfare.
“Child Helplines in the region meet on a bi-annual basis to reflect on the state of children; evaluate their contribution and share experiences and best practice in the provision of services for children,” said Chepete.
The financing of non-governmental organizations (NGOs) by the state or its functionaries has generated mixed reactions from within the civil society space, with many arguing that it threatened NGOs activism and operational independence.
In February 2019, University of Botswana academic Kenneth Dipholo released a paper titled “State philanthropy: The demise of charitable organizations in Botswana,” in which he faulted then President Lieutenant General Seretse Khama Ian Khama for using charity for political convenience and annexing the operational space of NGOs.
“Civil society is the domain in which individuals can exercise their rights as citizens and set limits to the power of the state. The state should be developing capable voluntary organizations rather than emaciating or colonizing them by usurping their space,” argued Dipholo.
He further argued that direct involvement of the state or state president in charity breeds unhealthy competition between the state itself and other organizations involved in charity. Under these circumstances, he added, the state will use charity work to remain relevant to the ordinary people and enhance its visibility at the expense of NGOs.
“A consequence of this arrangement is that charitable organizations will become affiliates of the state. This stifles innovation in the sense that it narrows the ability of charitable organizations to think outside the box. It also promotes mono-culturalism, as the state could support only charitable organizations that abide by its wishes,” said Dipholo.
In conclusion, Dipholo urged the state to focus on supporting NGOs so that they operate in a system that combines philanthropic work and state welfare programs.
He added that state philanthropy threatens to relegate and render charitable organizations virtually irrelevant and redundant unless they re-engineer themselves.
Another University of Botswana (UB) academic, Professor Zibani Maundeni, opined that politics vitally shape civil society interaction; as seen in the interactions between the two, where there is mutual criticism in each other’s presence.
Over the years, NGOs have found themselves grappling with dwindling financial resources as donors ran out of money in the face of increased competition for financing. Many NGOs have also been faulted for poorly managing their finances because of limited strategic planning and financial management expertise. This drove NGOs to look to government for funding; which fundamentally altered the relationships between the two. The end result was a complete change in the operational culture of NGOs, which diminished their social impact and made them even more fragile. Increased government control through contract clauses also reduced NGOs activism and autonomy.
However, others believe that NGOs and government need each other, especially in the provision of essential services like child welfare and protection. Speaking at the Civil Society Child Rights Convention in 2020, Assistant Minister of Local Government and Rural Development Setlhabelo Modukanele said government considers NGOs as critical partners in development.
“We recognize the role that NGOs play a critical role in the country’s development agenda,” said Modukanele.