Drop It, Lets Talk Fintech
Every country is dependent on Taxes. As time flew by from the 1800s to now, taxes grew and became even more complex. Governments on the other hand always ensure that their respective tax authorities are fully empowered to collect the tax. Botswana Government is one of the economies struggling to effectively collect tax. This is largely because the citizens are still to fully understand tax. Failure by citizens to understand tax makes it hard for the authorities to effectively collect tax. As it were, the citizens believe that it is the responsibility of BURS to collect tax, when in fact, it is the responsibility of a taxpayer to declare and pay tax. I am hopeful that BURS is making strides in the right direction, and I strongly believe BURS has somewhat improved in collection efficiency. Do not worry, we are not discussing tax, but it is vital that we touch base on it.
Lekgetho Live is one of the most progressive programmes to date by BURS after e-Services project. The whole idea of Lekgetho Live is to help you the taxpayer understand your responsibility of paying tax – and to make your life simple. Your previous Tax ID Number (TIN) will now be replaced by your National ID number – How profound! I am excited because it makes life simple. As for companies, the new company registration number BW000XXXXXX will be the TIN. Lekgetho Live joins e-Services to create a powerful handover of responsibility to you as the taxpayer. Now you can do your tax filing at your convenience – paperless. The intention to play in the 4IR by BURS is quite clear.
Silicon Valley is an interest to anyone out there who loves technology. Its development to what it became is quite fascinating. However, it is only fascinating to us consumers of the products & services of Silicon Valley, several taxpayers in the Silicon Valley area are not impressed because Technology companies are one of the biggest tax avoiders. Technology is quite expensive especially from inception and it often bites into the pockets of the founders (incl Inventors) and ultimately Investors (Largely Venture Capitalists & Angel Investors). A technology start-up company can go up to 10 years without paying tax. Forbes reported that, and I quote, “Facebook Inc. released its first “10-K” annual financial report since going public last year. Hidden in the report’s footnotes is an amazing admission: despite $1.1 billion in U.S. profits in 2012, Facebook did not pay even a dime in federal and state income taxes. Instead, Facebook says it will receive net tax refunds totaling $429 million. Facebook’s income tax refunds stem from the company’s use of a single tax break, the tax deductibility of executive stock options.”. In Botswana you can claim losses up to 5 years (Possibly revised to 3 years).
Botswana Innovation Hub should be leading the headlines in what they do, and their impact should be felt. As it were, they are just a real estate company enjoying overpriced rentals from start-up tenants. Their vision is “The leading destination of innovation in Africa”. Their mission is “To offer a unique platform for scientific, technological and indigenous knowledge-based innovation.”. Their Board comprises of individuals with beautifully decorated academic achievements. An Achilles heel on its own because we cannot leave innovation ideals to the hands of academic achievers! And there is no one from BIUST! Our Stanford University equivalent. Our 4IR journey needs all players. Academic, Non- academic, civil society, farmers, security, IT industry & several stakeholders which includes financial services and regulators. As we engage, safe cities project is motion, this is a key component in 4IR, and the guardians of safe cities project must have a seat at the innovation dinner table. But they are not even present at the Board, even the umbrella ministry, Ministry of Defense and Security seem sidelined in the innovation deal.
Not all is lost, we saw 5 companies out of 324 submissions getting grants amounting to P2m each. The 5 companies as per presentation by CEO Alan Boswaen include: (1) ElGenuin Engineering, a technology solution for monitoring and alert initiatives that uses advanced stability monitoring and alert technologies at a mining site. (2) Bayon Holdings whose pollution-free power generator is a hybrid solution generating electricity for domestic consumption. Mmoloki Makoba, Casper Nyamukondiwa and BITRI.
BIH must speed up its programmes to ensure that we have several businesses up and running having benefited from BIH. The benefits to our economy will surely be through Tax. Even though there is a 7% discrepancy between what companies under BIH (15%) are subject to and general companies (22%) on the Income Tax, the economy will likely benefit albeit in the longer term because of the growth patterns of IT companies which take long to benefit the Governments through income taxes. With that said, the catchment should be bigger than just 5 years. There must be visible partnership between BIH and the private market, not solely relying on Government. During COVID-19 BIH should have been the most visible company in helping adoption of technology especially by supporting tech-creatives. Since the lift of the lock-down we have seen long queues which are a risk and could be avoided. One such technology is QR Code.
QR Code is not new technology, but like defense technology it was adopted in the wide market late. QR Code means Quick Response Code. It is an advanced barcode. Barcode is about 80 years old having been developed by Denso Wave Incorporated. When Barcode or QR Code is mentioned, the prominent name around the development is a Japanese known as Masahiro Hara. He says with Barcode, information is coded one direction/dimension only, whilst QR Code information is coded two directions – Across and Up/Down. Originally the QR Code was just to be used within the auto industry with Denso Wave retaining the patent rights; however, they (Denso) declared not to exercise them. This is a low hanging fruit. A technology that BIH should help pioneer and support in its already in motion spread. This Japanese technology could work a great deal in zeal of 4IR. The fusion of it with the over 3million access to cellphones could make life better for the new normal coerced to us by COVID-19.
The 4th Industrial Revolution: It would be interesting to find out how other economies are embracing 4IR; Shall we?
See you next week