BAIA perturbed by P750m for controversial BURS tax stamp system

  • Contract expected to be reviewed after two years
  • BB fears alcohol prices could shoot up
  • BURS fails to produce impact assessment report


Business Botswana (BB) and Botswana Alcohol Industry Association (BAIA) are complaining that a 10-year multi-million pula alcohol and tobacco product monitoring contract awarded to US company, Authentix Ltd, is without justification.

In an interview, BB and BAIA say they have persistently requested that Botswana Unified Revenue Services (BURS) produce evidence and data that led to the introduction of the digital tracking system for tobacco and alcohol products but to no avail.

Data unavailable
The Director of Policy Advocacy at Business Botswana, Dichaba Molobe, told this publication that implementation of the system without data is a grave concern for operators.

“It is true that we did meet with BURS and Authentix last week,” Molobe said. “Although Authentix did not say much in our meeting, they did meet with operators and manufacturers separately,” said Molobe, who was part of last week’s meeting at the taxman’s headquarters in central Gaborone.

The long-term contract with US-based Authentix Ltd for the fiscal marking and digital tracking system for tobacco and alcohol products sold in the country is reportedly valued at over P750 million, The Botswana Gazette has established.

BB and BAIA meet Authentix
This publication has learnt that the contract is now in full effect. Business Botswana (BB) and Botswana Alcohol Industry (BAIA) Association confirm that representatives of Authentix were introduced to them last week.

Information revealed by the alcohol industry representatives shows that the tax stamp price has been capped at P0.15 on each alcohol and tobacco product entering Botswana.
According to data provided on the Authentix website, over 500 million alcohol and tobacco products enter Botswana’s borders annually. The US-based company is expected to make over P750 million from the deal. Sources in the alcohol and tobacco industry say the contract has a clause that allows the two parties to review terms after two years.

BURS unresponsive
While BURS would not respond to this publication’s questions about implementation of the system, suspended BURS operations commissioner Phodiso Valashia previously told the media that the decision to introduce the tax stamp followed six-year consultations with both the alcohol and tobacco industries. This is because one of BURS’ biggest concerns has been smuggling of alcohol and tobacco products into the country.
Molobe of Business Botswana has expressed serious concerns about implementation of the policy because they have not seen any data justifying it. “We did request for the justification study they did which informed the implementation of this system but did not get anything,” Molobe said.

Scale of the problem
“We asked for the data so that they could at least take us as the industry on board and justify their decision. They are telling us that there is a problem but they are not telling us what the problem is. We also need to understand the scale of the problem.”

“We expect a public office like BURS to be transparent as much as possible with us through this process because the introduction of this system means that it is the consumers who are going to bear the cost. Prices are going to increase.”

In addition, BB and BAIA previously wrote to the Minister of Finance and Economic Development, Peggy Serame, expressing their concerns about introduction of the tax stamp.

Minister Serame has yet to respond to the letter.