BURS laments outdated tax legislation
Keikantse Lesemela | Thursday November 13, 2014 11:11
Speaking at the Commonwealth Association of Tax Administrators BURS Commission in Gaborone, BURS Internal Revenue Division commissioner, Segolo Lekau, said the current legislation could not keep with modern business practices. “The current legislation is unable to keep up with modern business.
There are no transfer pricing regulations or legislation and there is no specific capital gains legislation,” he said. Transfer pricing happens whenever two companies that are part of the same multinational group trade with each other.
On the other hand, a capital gain is a profit that results from a disposition of a capital asset, such as stock, bond or real estate. According to Lekau, BURS inherited two systems in 2004 from Department of Taxes and Customs that were not integrated or robust and many processes are not computerised.
In the 2013-14 financial year, revenue derived from taxation stood at P31.7 billion against total revenue of P45.4 billion and this figure is expected to increase to P36.1 billion in 2014-15. However, Lekau said the organisation is faced with human resource and financial resource challenges. He said some of their shortages included few skilled workers who could use the modern commercial, tax environment and inability to recruit and retrain quality staff. He however said the reform to the funding model would overcome this.
Lekau further said this situation had impacted on the recently introduced e-filing system, as taxpayers’ uptake was poor.
“The e-filing service was introduced to provide a new service delivery channel for filing, which improves accessibility in terms of 24-hour-a-day, 7 days-a-week availability and geographic each in a secure and accountable way but tax payers are not coming up to use the service,” he said. Lekau highlighted that they expect to see a positive change on taxpayers after the development of high income tax.
“Since we are developing the high income tax we hope the uptake will improve. We need to devise incentives in order to change the mind set of our clients,” he said.
Lekau also said the organisation would consider the introduction and improvement of e-services for e-filing income tax and e-payments for all amounts.
The BURS e-services were introduced last year to help improve the country’s tax collection system and enhance efficiency within BURS. Its first phase consisted of filling of VAT returns and settlement of VAT liabilities after which the filling of other tax types will be rolled out to other taxes.
Once registered for e-service, taxpayers can view submitted vat returns, income tax notice of assessment, withholding (WHT) debit acknowledgement, customer assessment notice, and tax compliance summary report online. The E-service also enables taxpayers to submit VAT returns electronically.
BURS Chairman, Taufila Nyamadzabo, said in the last decade the government had embarked on several tax policy and administration reforms aimed at ensuring that the country continued to mobilise tax revenues efficiently and effectively.
Nyamadzabo said simplification of tax legislation was not an easy task. “We therefore need to strike a balance between the need to ensure a robust legislation that covers both the current global economic environment but also lends itself to ease of understanding to the average man on the street,” he said.
Nyamadzo said government was confident that they would overcome revenue service challenges and offer government and citizens, efficient service, and a sustainable flow of revenue.