Private sector calls for review of govt levies

Delegates at the Business Botswana seminar held in Gaborone
Delegates at the Business Botswana seminar held in Gaborone

The private sector has appealed to government to review the multiple levies that it says escalate the cost of doing business in the country.

Through their umbrella body, Business Botswana, the private sector stated that multiple levies undermine the competitiveness of firms in general.

Presenting a Business Botswana position paper on the impact of commercial levies on businesses, lead consultant, Lesikalala Gaseitsiwe called on policymakers and government to remove any proven detrimental effect of levies.

“What should be of concern all the time is to be able to review and discard what does not work as intended, or what is inconsistent with good practice, as supported by empirical evidence,” he said.

Some of the levies, which the business community considers ‘problematic’ include UTC milk levy, wheat flour levy, alcohol levy, road safety levy, tourism training levy and the BOTA training levy.

Gaseitsiwe also acknowledged that there are certain levies that have possible long-term justification such as the Road Levy and the National Electrification Special Fund.

“However, and to the extent that these are taxes, for all intents and purposes, they must go through the designated and unified national revenue process, and be accounted for through Parliament,” he said.

According to Gaseitsiwe, the use of a plethora of off-budget levies and special funds undermines good and accountable governance, when considering the authority and oversight of Parliament regarding public finances. 

He said the collection of levies by some authorities other than the Botswana Unified Revenue Service (BURS) only serves to compromise the efficiency of the national revenue-collection system.

He recommended that a review and some analytical work be undertaken by government to establish whether the use of levies and/or special funds should not be rationalised.

Gaseitsiwe also added that part of the review should be to determine whether households are, in fact, benefiting from levies, and whether certain levies are not unduly protective to a few corporate beings, at the cost of introducing anti-competitive tendencies.

He noted that the review and analytical work should be structured in such a manner that considers issues of efficiency in tax-collection, good governance in respect of referring to and oversight roles of Parliament and specialised organs like the Ministry of Finance and Development Planning.

“The issue of equitable use or employment of all levies should be interrogated and embrace consultations with stakeholders like the private sector, and those responsible for training and human resources development,” said Gaseitsiwe. He further said should certain levies be retained, it should be done after establishing the necessity of keeping surpluses, which far exceed the requirements of any ostensible regulatory functions.

In the 2014 first quarter economic review, economist Dr Keith Jefferies suggested that the levies are a form of a hidden tax and are generally frowned upon from a public finance perspective.

As at 2013, there were 37 special funds in existence, 19 of which are financed through levies that the government imposes on different activities.

During the fiscal year 2012/2013, the different levies generated over P995 million in revenue, with the largest contributors being the National Electrification levy (P232 million), the Vocational Training Levy (P215 million), the road collections levy (P210 million) and the Alcohol levy (P162 million).

Editor's Comment
DCEC, DIS wars threaten gov’t trust

This came about after the DIS agents raided and sealed the DCEC offices last week in search of files allegedly opened by the corruption bursting agency investigators against some of the DIS officers.The move prompted DCEC head, Tymon Katlholo to approach the court to seek a restraining order against the DIS, which the court duly granted through a rule nisi.The turn of events came as a shock to many, especially that the impasse involves two...

Have a Story? Send Us a tip
arrow up