Business Botswana Gives Budget Speech Thumbs Up
Staff Writer | Monday February 11, 2019 13:46
According to the organisation, in a challenging revenue environment, spending increases are modest and as a result the budget entails a manageable deficit.
“We do not expect the budget to be inflationary. The deficit also provides an opportunity for the government to issue bonds especially in the current low interest environment. Domestic institutions have funds that are available to invest in government bonds,” said BB
It further commended government for continuing to allocate funds to finance essential infrastructure and social protection noting that the efficiency of infrastructure spending needs to be improved and social protection spending needs to be better targeted on the needy.
They also approved the decision to increase public service salaries hoping the increase will not lead to an unsustainable impact on public spending.
“With respect to the private sector salaries increase, it should be appreciated that affordability, profitability and productivity are the key determinants.”
In addition, they welcomed plans by government to present the Bill on the declaration of Assets and Liabilities to Parliament in July 2019 suggesting that the initiative will promote transparency, good ethics and integrity in the public service.
“Business Botswana remains concerned about the decision by government to allow civil servants to run businesses. The declaration of assets and liabilities is an important tool in the fight against corruption. While Business Botswana appreciates the need for the government to review fiscal legislation to expand the tax base, due care should be taken to avoid unintended consequences,”
They said amendments should be preceded by extensive consultations with all interested parties including a transition period. According to Business Botswana, some of the recent tax changes, which were not subject to a consultative process will have a potentially adverse impact on the private sector, and will discourage investment.
However they suggested that care must be taken to ensure that fiscal measures do not run counter to other improvements in the business environment.“We welcome the review of fees and charges in line with the policy of cost recovery.
We should however, be mindful that the collection costs do not outweigh the expected revenue. The review should ensure that all such fees and levies are on-budget, and not managed off- budget to avoid accountability deficiency that currently afflict some levies. In particular, off-budget special funds should be avoided,”
Going forward, Business Botswana advised that the quality of revenue forecasts needed to be improved to make them more realistic highlighting that the fact that non-mineral income tax collection is expected to under perform by 33.3%, is a case in point.
They also welcomed the establishment a Project Management Office (PMO) in the current financial year, which is expected to promote effective and efficient implementation of infrastructure projects. “This needs to be complemented by reducing delays in getting permits for Environmental Impact Assessments (EIAs) and general planning permissions.”
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