The Botswana Unified Revenue Service (BURS) has launched an investigation of big investors and public leaders, including ministers, Members of Parliament and their immediate relatives who own businesses and are believed to be evading tax.
BURS preliminary investigations suggest that tax fraud in Botswana starts at the top. Public leaders who make revenue policies, run government and collect taxes do not set good examples.
BURS this week raided the offices of RSM GuruGroup, part of the international RSM group, one of the world’s leading audit, tax and advisory networks, and impounded laptop computers and files of some big companies, some linked to cabinet ministers, MPs and their relatives.
RSM GuruGroup Managing Partner, Guru Gurumoorthi, confirmed that BURS swooped on their offices unannounced on Thursday and asked for a list of their clients and demanded files of some companies on the list.
Gurumoorthi told Sunday Standard that the style of tax investigation on their clients by BURS was unprecedented.
“They have adopted a new style; they did not specify the clients they are investigating. They just asked for a list of clients and then demanded files of some of the clients which has not happened in the past.”
BURS also quizzed the RSM GuruGroup on the tax determination process which results in the tax returns being filed “which has never happened in previous investigations”, said Gurumoorthi.
Sources inside the RSM GuruGroup told Sunday Standard that among clients being investigated is a company owned by a cabinet minister, which is doing business with government although it was denied a tax clearance certificate. It also emerged that the company is also being investigated for tax fraud on allegations that it applied for tax rebates on goods imported outside the Southern African Customs Union claiming that that the goods were being supplied to government while some of the goods were allegedly for the private market.
Another company owned by a Botswana Democratic Party Member of Parliament is being investigated after it emerged that the company has been deducting pay-as-you-earn (PAYE) tax from employees pay checks and pocketing it instead of remitting it to government.
This came to light after some of the company employees complained to BURS that their employer would not give them their PAYE tax certificates.
Sunday Standard has also established that other clients of the RSM GuruGroup under investigation include a company owned by a Cabinet Minister’s son and another owned by a Member of Parliament also from the ruling BDP.
BURS is also investigating a number of big companies believed to be evading tax. The investigation comes in the backdrop of growing concerns that the close relationship between politicians and Botswana’s top businesspeople is helping to drive corporate tax evasion.