I simply don’t understand two recent decisions by our otherwise sensible tax authority.
Firstly they’ve instructed all taxpaying companies who pay rent to withhold 5% of their rent and pay that directly to BURS instead of the landlord. I know why they’re doing this of course, it’s obvious. There are landlords out there that aren’t declaring their rental income and evading paying tax on it. That’s why they’re making tenants identify their landlords when they pay this 5% to BURS. But why are BURS making life even more difficult for the law-abiding, rent-paying tenants rather then the tax-evading landlords?
There was a story in South Africa recently about a food poisoning incident in Rustenburg. I think it’s relevant. According to News 24,:
“(a) restaurant owner faces a charge of attempted murder after 18 customers were treated for suspected poisoning … Police swiftly responded to a call when 18 victims passed out as a result of eating food they bought from a restaurant at the Rustenburg taxi rank.”I’m not sure if attempted murder is the right charge but whether it is or not I bet the standards of hygiene at the Rustenburg bus rank are excellent these days. Just the thought of prosecution for attempted murder is enough to ensure excellent standards.
So why aren’t BURS doing the same thing instead of this silly withholding business? Why aren’t they coming down on naughty landlords like the proverbial ton of bricks? The irony is that BURS already has a reputation for toughness. I spoke to a friend who operates a large business employing over 1,000 people and he said he wouldn’t dare try and outsmart BURS. They’re way too scary to try fooling. He pays his taxes without fail.
All it would take is for a few landlords to be prosecuted for tax evasion and I promise you that landlords across the country would become the most law-abiding business people.
OK, another problem. Even sillier than the 5% withholding tax is another new rule that BURS has apparently introduced. In 2011, already into the second decade of the twenty-first century, in the days of internet and cellphone banking, we now have to pay all tax amounts below P500 in cash. Did you read that? IN CASH.
This is simply silly. Speaking personally this has now become an enormous pain in the backside. Just last week one of our team went to pay two things to BURS: our monthly tax bill and also the 5% withholding tax on our office rent. The first was OK, we paid that by cheque. However my colleague was sent back by BURS who refused to accept our cheque for the 5%, around P300, and demanded cash instead.
Don’t they understand that this is yet another extra burden for businesses? Aren’t we supposed to be encouraging businesses to come to Botswana, invest money and employ and train us? Aren’t we supposed to make it easier for small companies to start up and make money? Aren’t we interested in making it easier for law-abiding businesses to operate?
Instead we seem to be adding to the bureaucracy and regulation, not cutting it back.
Of course I’m not opposed to some level of regulation and control. That’s the nature of the social contract between people and their elected government. They protect us from crime, disaster and invasion and in turn we pay our taxes and obey the speed limit. That’s liberal democracy. Liberal because all things are permitted until there’s a good reason to forbid them, democratic because we the people can influence what things are forbidden.
Two observations for you. First, can you identify the last time that two genuine liberal democracies went to war with each other? Answer: it’s never happened. In liberal democracies people are too busy making money to feed their children and improve their lives to go to war with people in another country doing the same thing. It’s not natural for such countries to go to war.
Second. It’s exactly 50 years since the Government of East Germany constructed a wall through the middle of Berlin with the specific intention of preventing East Germans going to West Germany and being exposed to dangerous things like liberalism, democracy and the right to do as they pleased. These were such ghastly things that the disturbed Marxists in charge were convinced that their people, their flock, their sheep-like people couldn’t be trusted with them. I have a slightly better view of humanity.
As I said, I’m not against a healthy dose of regulation, just to make sure that people obey the laws and play fairly. I’m also a big believer in taxes, so long as they’re fairly applied and don’t cripple the people who make the money to pay them. However, and it’s a big however, the level of regulation and taxation must be so high that it stifles the willingness of businesses to operate.
If this all goes wrong you know who suffers, don’t you? You and me, ordinary consumers who just want to buy things. BURS are running the risk of preventing us from doing exactly that.
This week’s stars
- A reader got in touch to celebrate Mr Phake at Jamal Trading Company in Gaborone, Ms Ntshweu, the Postmaster at Main Mall Post Office and Mr Vapi, the Postmaster at Broadhurst Post Office. She said she sought “assistance in their organizations and when I left I was the happiest customer … I had thought good customer service was no more especially in Gaborone but these three individuals have proven otherwise. Keep it up!”