Trade misinvoicing cost Gov’t over half a million Pula in 2014 – BURS

Botswana Unified Revenue Service (BURS) has indicated that government lost over P500, 000 due to misinvoicing last year only. Botswana government, like any other in the world, raises public revenue through amongst other things, customs duties, taxes and levies.

Gazette Business last week carried a story in which the Illicit Financial Flows from Developing Countries 2002-2013 report by the Global Financial Integrity regarded trade misinvoicing as the largest component of illicit financial outflows in the world.

Responding to a Gazette Business questionnaire, BURS has since said the people who do trade misinvoicing, whom they referred to as criminals, are influenced by the desire to increase their profits. “Goods imported into Botswana attract specific customs duties, taxes and levies based on the purchase price of the goods. However, some criminals fraudulently declare lower values on their goods, to the detriment of public revenue, in order to increase their profit margins,” the customs and tax collecting parastatal said.

It said; “Between January and December 2014, the amount that the Botswana Unified Revenue Service recovered after discovering that goods have been under invoiced is above P500, 000.00. The loss of public revenue due to under invoicing could well be millions of Pulas when considering the fact that given the need to facilitate the ever increasing volumes of cross-border trade, as is the case with other countries around the world, the Botswana Unified Revenue Service does not subject every single import or export transaction to rigorous Customs examination thereby leaving some scope of missing some invoices that could have been deliberated manipulated for purposes of avoiding to pay the correct amount of customs duties, taxes and levies.”

The parastatal said it is a criminal offence to issue it with a false invoice or statement “the effect of which is to ultimately not pay or pay a lower amount to what is prescribed under relevant Revenue Laws.” It explained that in terms of the Customs and Excise Duty Act, any person who makes use of a false statement or invoice for the purposes of an import or export declaration, unless he or she proves that he or she was ignorant of the falsity of such statement or invoice, is liable to a fine not exceeding P40,000 or treble the value of the goods to which such statement or invoice relates, whichever is the greater, or to imprisonment for a term not exceeding ten years, or to both, and the goods in respect of which such false statement or invoice was made shall be liable to forfeiture.

BURS said such criminal activities are usually intercepted through commodity expertise of its customs officers, customs examinations on import or export goods and post audits of import and export transactions.