The business conduct of Chinese companies was once put under scrutiny this week when Francistown West MP, Ignatius Moswaane, alleged through a parliamentary question that “most Chinese businesses in Botswana have not registered for Value Added Tax.”
“To be honest, I am not aware that most Chinese businesses in Botswana have not registered for VAT. In any case, the registration for VAT is not done according to the nationality of the shareholders/directors of the business,” said Finance Minister, Kenneth Matambo when beginning his response.
He then explained the conditions under which VAT is paid, telling parliament that unless exempted, all businesses which have an annual turnover of P1 million or more are required to register for VAT purposes. Once a business has been registered for VAT purposes, it is required to comply with the provisions of the VAT Act through filing tax returns and payment of the VAT collected to Botswana Unified Revenue Services (BURS).
“Any business which fails to comply with its VAT obligations will be committing an offence for which stringent fines and penalties are prescribed in the VAT legislation. In conclusion, BURS routinely inspects businesses countrywide to determine their VAT compliance. Further, I wish to plead with any person who may be aware that a business that is liable to register for VAT or any other tax but has not done so to report the matter to BURS for follow-up action,” Matambo said.
In response Moswaane said the Matambo should consider his question as a tip-off and “gone out there to check for himself because this is a prevalent problem amongst the Chinese in particular.” There was no need for that, the Minister responded, because BURS undertakes all the necessary inspection. A skeptical Haskins Nkaigwa (Gaborone North) also quizzed Matambo on what BURS does “in order to determine if indeed the declaration that is being done reflects the true performance of the company or if they do not tamper with the numbers.” Again the Minister referred to what the law says in the instance of such wrongdoing.
On the whole and although they continue to do win government’s mega-projects tenders, the Chinese have not impressed some of the powers-that-be much. There have been widespread complaints (including by President Ian Khama) about the poor workmanship they bring to the construction of mega projects.