Officials from the tax man’s office have helped the government to recover around P20 million fraudulently obtained Covid-19 relief funds, minister responsible for public funds – Peggy Serame has said.
Serame, who was answering questions from Members of Parliament this week, said thatan investigation carried by the Botswana Unified Revenue Services (BURS) revealed that some companies successfully received some money from the Covid 19 Relief Fund. The wage subsidy set up by the government in April 2020 was administered by BURS and it’s the reconciliation is still ongoing according to Serame.
In their investigations, BURS officials are said to have discovered that close to 900 companies’ defrauded government with claims worth P20 million.
The BURS investigations have shown that the fraud entailed double dipping, use of forged Omang documents, inflating number of employees and the wage due. Also identified were ghost employees, especially use of relatives by some companies. The recent investigations follows preliminary one done in June 2020 that showed that atleast 380 civil servants names appeared amongst those who seek wage relief from the government during the month of April 2020.
While at the time she could not commit on whether the government will take any punitive action against the identified civil servants, the then Finance Ministry Permanent Secretary Grace Muzila said they had also identified some private companies which also submitted claims for “ghost” employees.
“We have written to their Permanent Secretaries to get explanation from them”, Muzila said in June 2020.
Fast forward to July 2021, Serame says the reconciliation of the wage subsidy is currently in progress and more companies may be identified during the process.
The recent revelations comes at a time when the local economy has lost as much as P16.7 billion in 2020 as GDP output shrank on the wake of the deadly Covid-19 outbreak which affected economic activities.
Statistics Botswana’s gross domestic product (GDP) data for the last quarter of 2020 shows that nominal GDP – which measures a country’s gross domestic product using current prices, without adjusting for inflation – declined from 2019’s economic value of P197.5 billion to P180.7 billion in 2020, down by 8.5 percent.
Most sectors experienced negative growth in the second quarter as a result of the stringent containment measures implemented by the government for the larger part of last year. Though it had relatively fewer coronavirus cases, Botswana implemented a severe nationwide lockdown beginning of April, running for 48 days until mid-May. The government later placed Gaborone, the nation’s capital and the hub of economic activity, under lockdown for two weeks in early August.
In the third quarter, the GDP shrunk by 6 percent before easing with a 4.1 percent contraction in the fourth quarter of 2020. It was the softest economic downturn in the current three-quarter sequence of contraction, a sign of continued efforts to reopen businesses and resume activities that were postponed or restricted due to the COVID-19 pandemic.
Though the retreat in economic activity is largely attributed to Covid-19 containment measures, Botswana’s economic cogs were already grinding slowly before the pandemic, creating extra pressure to the nation’s ballooning budget deficits and structural problems such as a poorly diversified economy and the soaring jobless numbers.