The President of the Botswana Institute of Chartered Accountants (BICA), Vijay Kalyanaraman, has revealed that the Botswana Unified Revenue Service (BURS) and BICA will, in the very near future, sign the BURS/BICA Tax Consultative Committee (BBTC) Terms of Reference (ToR).
Kalyanaraman, who is also Chairperson of the BICA Tax Committee and a Grant Thornton Partner, said the signing would enable BBTC whose mandate was, among other things, to consult and engage on the review of the provisions of the revenue laws namely, Income Tax and VAT Acts, with a view to coming up with an efficient tax legislation.
He told Sunday Standard in Gaborone with reference to BICA tax update workshops conducted in Francistown and Gaborone on September 17 and 19, Kalyanaraman encouraged those who had the privilege of participating in the fora to share with BICA their general concerns relating to taxation procedures and their appreciation of BURS initiatives so that they could be brought to the latter’s (BURS’) senior management’s attention for consideration.
Kalyanaraman said: “The event was coordinated by the BICA Tax Committee and was meant to discuss various developments in the Botswana taxation arena with members and stakeholders.”
BICA Administration Manager Regina Ramanteba said BICA would continue conducting similar value adding workshops as the best way forward. BICA Tax Committee Member and KPMG Botswana Partner Nigel Dixon-Warren said current improvements in the country’s tax legislation are designed to create a more user friendly environment for taxpayers and tax practitioners alike.
Nigel said: “The interactions between BICA, the Botswana Chamber of Commerce, Industry & Manpower (BOCCIM), BURS, the High Level Consultative Council (HLCC) and the National Doing Business Committee (NDBC) at stakeholders` fora help shape the macroeconomic policy of Botswana. The intended introduction of VAT E-filing by BURS in 2013 had potential positive financial implications for taxpayers. Plans were underway to allow BURS to retain some of the tax collections to fund its operations, thus affording BURS an opportunity to improve its operational efficiency and effectiveness.
“The Large Taxpayer Unit (LTU), which became operational in May 2012 and caters for 200 large taxpayers who contribute more than 70 percent of tax collections, had enhanced revenue collection and improved customer service for the key clients.”
KPMG Tax Advisor Jonathan Hore summarized the changes in the tax regime which were effective from July 2011 which included the introduction of the 5 percent withholding tax (WHT) on rentals.
According to Hore, there would be challenges where the rental payments are in arrears as BURS expects payments of WHT to be per lease agreements, for instance, on an accrual basis. The other change involved the restriction of deduction of expenditure on foreign payments of interest, management & consultancy fees and royalties to the year in which WHT thereon was paid over to BURS. BURS’ latest 10 percent final WHT was levied on surpluses from approved mine rehabilitation funds.
Botswana Accountancy College (BAC) Taxation Courses Course Manager Cecilia Ramabu said after July 2011, persons with incomes exceeding the threshold of P36 000 annually needed to apply to BURS for tax identification numbers (TIN) which would be used for the payment of income tax. Ramabu warned individuals who fail to register with BURS could be charged a penalty not exceeding P10 000.
Grant Thornton Tax Services Partner Rajesh Narasimhan said BURS had introduced a new form to standardize the recording of taxpayers’ “Objections” and thus avoid delays in BURS providing responses.
“The new form requires taxpayers to spell out precisely the grounds for the Objections. Current discussions between BURS and BICA addressed the challenges faced by taxpayers in completing the new taxation form recently introduced for companies, taking into consideration the planned move towards E-filing. BURS should consider accepting soft copies of the various details requested in the form as a way of easing the complications”, Narasimhan pointed out.
Doreen Kokorwe-Raglin of the Botswana Training Authority (BOTA) said the Authority fits into the tax benefit equation for companies paying a levy towards its Vocational Training Fund (VTF). According Kokorwe-Raglin, BOTA accredits institutions, registers teachers and develops standards and curriculum for the Technical Vocational Educational Training (TVET) sector.