February 8, 2005
Gaolathe calls for income tax review

PARLIAMENT - The Minister of Finance and Development Planning, Baledzi Gaolathe, says it has become necessary to consolidate all previous minor amendments to the Income Tax law lest they create uncertainties and inconsistencies.

Gaolathe said this when presenting the 2005/06 budget in Parliament yesterday.

He said the last major review of the Income Tax legislation was done in 1995. The government has decided to undertake a comprehensive review of the Income Tax Act.

Gaolathe stated that the review would take place this year with a view to presenting a consolidated Income Tax Bill to Parliament next year.

The Botswana Unified Revenue Service (BURS) continues to be faced with the problem of poor tax compliance. He said the income tax compliance entails filing income tax returns on time, declaring the correct income and paying the due tax on time.

"Although the filing of income tax returns on time has improved over the last three years following the introduction of the self-assessment system for corporate taxpayers, there is room for improvement," Gaolathe said.

Currently, about 70 per cent of income tax returns were filed on time, the target is to increase the rate of filing on time to at least 90 per cent during the next financial year.

On declaration of income, Gaolathe said some taxpayers were failing to pay taxes on due dates. Therefore, BURS would intensify its income tax audit programme and would, where necessary, impose penalties in accordance with the provisions of the law.

BURS was able to reduce the old income tax arrears that accumulated over a number of years from P430 million as at March 2002 to P180 million as at December last year.

Gaolathe said audits conducted on VAT had revealed some cases of under reporting of output tax and over stating of input tax.

"Stern action has to be taken against those who fail to comply with the tax law in fairness to tax payers who comply fully," Gaolathe said. BOPA