Out of the 20 701 Batswana-owned companies that benefitted from the COVID-19 Wage Subsidy Support, about 870 obtained money from the fund through “fraudulent” means.
The scheme which was too broad in its scope allowed
scores of big companies with healthy balance sheets that have always privatized their profits in good times to now socialize their loses – Sunday Standard investigations have revealed.
Head of Public Relations in the Ministry of Finance and Economic Development, Fenny Letshwiti confirmed this week that about 870 companies tried to defraud the job-keeper scheme. He told Sunday Standard that “the Botswana Unified Revenue Services has since recovered an amount above P20 million from the companies and recovery measures continue. Most of the companies have been handed over to the Botswana Police Service for investigation and possible criminal prosecution.” Letshwiti revealed that companies that applied for the subsidy signed an undertaking, which amongst other things, compelled them to pay the claimed subsidy “wholly” to beneficiary employees.
The scheme also allowed some Botswana tax exiles to claim millions of Pula from the wage subsidy fund. Sunday Standard investigations have turned up information that one company which is registered in a tax haven claimed millions in pay check subsidies for its 900 or so employees.
At the same time that this subsidy was being disbursed, which is about a year ago, some organizations that were also donating to the President’s Covid-19 Relief Fund. There was some oddity around this generosity though. In one instance, senior managers at one state university donated to the Fund on the grounds of the Office of the President, with no less a personage than Vice President Slumber Tsogwane officiating at the mock-cheque ceremony. A few days later, those same managers called at the Ministry of Tertiary Education, Science and Technology headquarters with a begging bowl in hand. It also seemed more than a little odd that when the subsidy stopped, the donations also stopped. Sunday Standard sought to find out if there are any companies that benefitted from the subsidy, didn’t pass the money on to employees as wages but donated to the Fund. This latter scenario would have meant that the source of the money that was being donated to the government was in effect, the government itself.
In answer to our question, Letshwiti said that BURS, a department under the MFED, doesn’t have an official record of companies that donated to the President’s Covid-19 Relief Fund and was thus not in a position to ascertain whether or not any subsidy defaulters donated to the Fund.
The scheme’s primary purpose was to support jobs and incomes by providing an immediate cash injection to businesses affected by Covid-19 in the form of a lump sum payment.
Sunday Standard investigations have however turned up information that the scheme which was too broad in its scope was easily abused by businesses who did not need a government handout because they were well financed or were doing reasonably well despite Covid-19.
Companies with strong balance sheets that could easily financially sustain themselves exploited and abused the wage subsidy to benefit shareholders.
Some of the companies that took tax payers money in wage subsidies are reported to have posted healthy profits and declared dividends for shareholders.
The COVID-19 Wage Subsidy Support came into effect last year on April 1, 2020, ended on December 31 and was implemented in two phases.
“The first phase covered a three-month period from April to June 2020,” explained Letshwiti. “In this phase, all eligible sectors, as per the guidelines, claimed for their employees and the total amount disbursed during this period was P832 844 027 58. The second phase was a six-month period from July to December 31, 2020. In this phase, the wage subsidy was extended only to the tourism sector, which was considered hardest hit by the pandemic. During the period, an amount of P143 340 158 28 was disbursed from the fund as wage subsidy for employees of this sector.”
Overall, a total of P976 184 185 86 was disbursed from the COVID-19 Wage Subsidy Support.
