Thursday, February 29, 2024

Business Botswana recommends review of levies

Business Botswana last week discussed key issues relating to the plethora of levies imposed by government on business, eventually resolving that such levies increase the cost of doing business. When Finance Minister Kenneth Matambo delivered the 2015/16 budget speech earlier this year, Business Botswana argued that the minister could have evaluated the numerous government levies that are heaped on the private sector to explain the extent to which they achieve what they have been set up for. This argument was based on the assertion that the levies add significantly to the cost of doing business. 

In its position paper on reformation of levies, Business Botswana highlighted a number of levies that it considers problematic and stated reasons why it holds such a position. To mention a few, the paper highlighted the alcohol levy, road safety levy and BOTA training levy, further explaining that its findings are supported by other institutions such as International Monetary fund (IMF), the World Bank and local economic think tank, E-consult. 

Based on the findings, Business Botswana summed the position paper with details that capture the gist of its concerns around the levies. The objective was to inform the discussion with a view to overhauling the levies so as to introduce efficiencies, accountability and their impact. Business Botswana made the following recommendations:   

That a review and some analytical work should be undertaken by government to establish whether the use of levies and/or special funds should not be rationalized. Part of the review should be to determine whether households are, in fact, benefitting from levies, and whether certain of the levies are not unduly protective to a few corporate beings, at the cost of introducing anti-competitive tendencies. It further recommended that the suggested review and analytical work should be structured in such a manner as to consider issues of efficiency in tax-collection, and good governance in respect of referring to and considering the oversight roles of Parliament and specialized organs like the Ministry of Finance and Development Planning. 

The issue of equitable use or employment of all levies be interrogated, and embrace consultations with stakeholders like the private sector, and those responsible for training and human resources development. 

Should certain levies be retained, this should be done after establishing the necessity of keeping surpluses, which far exceed the requirements of any ostensible regulatory functions.


Read this week's paper