Money laundering causes distortions in economic statistics

The billions that are collected by Botswana Unified Revenue Service (BURS) every year help towards the development of the nation. It is the first principle of running a State that every politician should be conscious of as they preach issues of governance, better health care, poverty eradication, job creation and economic diversity amongst others.

Understanding the value of taxation by our leaders should place them on a greater moral pedestal of honouring their tax obligations as opposed to engaging in tricks to circumvent them.

Tax and corruption go hand in hand. Reports by Global Financial Integrity (GFI) and the OECD indicate that African states and their citizens remain poor because of billions that are illicitly channelled out of the countries, most of the time by elites and politicians. We need to recall the importance of the “Panama Papers” and other revelations of politically and publicly exposed personalities syphoning off their finances to off shore tax havens for their personal benefit to the detriment of their own people.

According to the 2018 GFI report, Botswana lost approximately US$20 billion, about P200 billion between the years 2004 to 2013, through illicit money transfers. This makes it four times the size of our Sovereign Wealth Funds.

GFI states that countries having lax anti money laundering laws attract illegitimate money from foreign jurisdictions. Such countries face a high risk of losing their reputation internationally and may be tagged as high risk nations and, therefore, loans to those countries will come at a higher rate of interest. The Financial Action Task Force (FATF) does a mutual evaluation of most countries at regular intervals.

Countries found with lax anti money laundering laws can be put on the list of “Non-cooperative Countries and Territories” (NCCT), leading to international shaming and subsequent financial repercussions.

Because it is easy to launder illicit funds in and out of Botswana, France has refused to de-blacklist our country from a NCCT tax haven status which now means that Batswana cannot open bank accounts in the European Union.

Probably a good punishment for Government to start tightening its policies and enacting various legislated instruments to put an end to this plunder. Instead of creating various ill-advised levies and funds that do not only rob the consumer of their last penny, collecting every penny worth of tax can cushion government from the ever dwindling economic tide.

Ruling party and opposition leaders should be as as morally invested in the country’s taxes and address them with same heartiness they possess when fighting for constituencies and party positions. Avoiding tax robs our public service and hinders development and the fight against poverty.