Chinese company, Unik Construction Engineering (Pty) Ltd has emerged as the biggest beneficiaries of state-funded contracts as it has been awarded tenders for projects valued at over P1.4 billion.
Despite this, it still remains unclear as to how much the company has paid to the Botswana Unified Revenue Service (BURS) as the Minister of Finance and Economic Development, Peggy Serame told Parliament that she is constrained by BURS tax laws to share such information with third parties.
Unik Construction Engineering was awarded five tenders in the past 10 years, competing as an individual contractor and as a joint venture. The value of these projects is one billion, and forty-seven million, six hundred and forty thousand, eight hundred and eighty-eight pula and sixty-one thebe, (P1 047 640 888.61).
Serame was responding to a question raised by MP for Selibe Phikwe West, Dithapelo keorapetse where he quizzed about the Public Procurement and Asset Disposal Board (PPADB) facilitated government tender bids won by or awarded to UNIK Construction.
Serame stated that the projects were awarded inclusive of the Value Added Tax (VAT), which means that the total amount of tenders awarded to bidders included 12 percent VAT. She added that the estimated amount of VAT was one hundred and twelve million, seven hundred and eighty-seven thousand, two hundred and thirty-four pula and fifty-one thebe (P112 787 234.51).
“I am constrained by the law to disclose the tax paid by this taxpayer to the BURS. In terms of section 32 of the BURS Act [Cap. 53:03]; section 5 of the Income Tax Act [Cap. 52:01]; and section 65 of the Value Added Tax [Cap. 50:03], there is a general obligation of secrecy and confidentiality regarding tax matters of individuals and corporate,” said Serame.
She further stated that disclosing taxpayer information will be contravening the laws. She also spoke of the Citizen Economic Empowerment (CEE) Policy of 2013, which she said makes it mandatory for foreign contractors to sub-contract works to 100 percent citizen-owned contractors and the scheme offered price preference depending on the percentage of works sub-contracted to citizens.
“There are no exchange controls in Botswana, after they were abolished to promote investment. This means that companies are free to invest and repatriate profits after meeting all the legal requirements,” said Serame.
She also spoke of construction of government bulk strategic petroleum storage depot at Tshele Hills Bulk Earthworks. She confirmed that there was no subcontracting as the contractor was directly appointed to complete the remaining works which had reached 77 percent completion at the time of termination of citizen contractor, Bowmag Construction (Pty) Ltd, for non-performance.