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BURS Closes In On Shadrack Baaitse P72m tax row

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  • BURS, Baaitse square off in court
  • Prevailing Security alleged to have evaded millions in tax

LETLHOGILE MPUANG

The Botswana Unified Revenue Service (BURS) is demanding its share of taxes from the millions of Pula which were allegedly never declared by a local company, Prevailing Security Pty LTD during the past 10 years.

A responding affidavit filed before the Gaborone High Court by BURS General Manager Compliance Kaone Molapo on Friday 11th September 2020 alleges that the company failed to avail tax records requested by the taxman for the years 2012-2018. Prevailing Security is owned by local entrepreneur and pastor Shadrack Baaitse. The company’s business activities include provision of security guard services, closed-circuit television installations and Cash-In- Transit services.

They provided these services for several government departments, parastatals. Prevailing Security is the applicant in this matter while the BURS Commissioner General and BURS are cited as the first and second respondents respectively.

The company is seeking reassessment of its tax income bill from far back as 2012. “The introductory communication to the company of the tax investigation was by way of a letter dated 17th August 2018, requiring the furnishing of information for the tax years 2012, 2013, 2014, 2015, 2016, 2017 and 2018,” states Molapo’s submissions.

“With the Company’s failure to provide the required accounting records and the books during the course of the investigations for all the covered years, including source documents for sales, sales invoices, expenses invoices, general ledger and books of prime entry, the second respondent invoked the reconstruction technique of bank deposit method.”

Molapo makes very strong claims that the company did not declare all income deposited in the Company’s bank accounts and by ultimately understating its taxable income between December 2012 and 2018. The taxman says they were able to establish that “the money deposited into the company’s accounts for the stated period amounted P72 420 714 39, in contrast to turnover declared by the company over the same period for VAT as P19 600 974 00 and turnover declared for income tax as P24 8222 056 00. This demonstrates the Company’s incomings over the periods understated by the company in its tax returns for both VAT and income tax.

WHAT WAS DECLARED VS WHAT SHOULD HAD BEEN DECLARED

2014

The company declared taxable income of P92 144 which was offset by a brought forward loss of P 1, 576 625 resulting in a loss carried forward of (P1, 484, 481) and consequently paid no tax for the particular tax year.

BURS FINDINGS : Investigations allegedly established that the true income derived by the company for the particular tax year is P13, 910, 076, 01, with a consequent liability of P 3, 060, 216,72.

2015

The company alleged that it derived zero income and consequently paid no tax for that particular tax year.

BURS FINDINGS: The true income derived by the company for that particular year was allegedly P11, 525, 978 .35 with a consequent liability of P2, 535, 715, 24.

2016

The income tax return declared was said to have been P42, 038 and consequently paid P9, 248. 36 tax for that particular year.

BURS FINDINGS: The true income derived by the company for the particular tax year was allegedly P11, 852, 590, 13 and consequent liability of P2, 607 569, 83.

2017

The company declared P20, 377. 00 and paid no tax for the particular tax year.

BURS FINDINGS: The true income derived by the company was said to have been P16 427, 932,07 with liabilities of P3, 614, 145, 06.

2018

The company declared losses of P138, 135.00, which included a carried forward loss of P20, 377, 00 and paid no tax for the particular tax year.

BURS FINDINGS: The true income derived by the company was said to have been P18, 704, 137, 83 and liabilities of P4, 114, 910, 32

 

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