For Gomolemo Bofefo’s company, which imports second-hand clothes from the United Kingdom, the primary hurdle to conducting business comes from an unexpected source—the taxman.
The Francistown-based small business, UK-Bales, has encountered a myriad of challenges, spanning from unnecessary clearance delays to unwarranted seizure and forfeiture of goods by the Botswana Unified Revenue Services (BURS).
“My ordeal with BURS began when my business started gaining traction. The situation escalated in 2021 when BURS delayed clearing a container with 240 clothing bales at the Mohembo Border Post over what I believed to be a simple mistake that could have been resolved amicably. It was held for three months and I ended up paying triple the value of the goods within the container,” Bofefo said as she narrated her experiences with the BURS.
In another incident in 2022, also at the same border post, Bofefo recounts being falsely accused of smuggling 12 sample bales. She alleges that she was coerced into paying P50,000 as an admission of guilt, in addition to the P68,000 already paid in clearance tax for the 250 bales she was importing.
“BURS accused me of smuggling the sample bales, despite being openly displayed. I attempted to reason with them, pointing out the inconsistency of smuggling 12 bales while declaring 250. However, my explanations fell on deaf ears. To my dismay, they proceeded to impound the 16-tonne truck and the bales indefinitely, even after I paid what I later learned was an admission of guilt fine of P50,000 – a fee I would have not paid if I knew it meant forfeiting my goods. The state then seized my goods for auction, and I’ve been tirelessly fighting for them since then,” she recounted
She is not alone. Her experiences reflect a broader sentiment held by the small business community that bribery and connections are the only way to deal with the BURS.
“We are well aware that we do not face the same clearance charges as those with connections within the BURS. Some get away with selling bales at giveaway prices as they barely incur any duties or taxes at the borders because they bribe officials,” Bofefo remarked, hinting at her belief that her harassment by BURS could be linked to her refusal to engage in bribery.
The perception of collusion between BURS and foreign businesses has also fueled mistrust and frustration among local entrepreneurs, many of whom feel marginalised and unfairly treated.
“From my perspective and many Batswana, they are sabotaging small businesses to protect monopolies that have long been established and owned by non-Batswana. They apply regulations to the screen length when it comes to the small man but go soft on established businesses,” said Setlhomo Tswanelang who runs Perfumery with Setlhomo, an online perfume reseller.
According to Tswanelang, Batswana-owned businesses frequently face unnecessary scrutiny by the taxman, unlike their foreign counterparts.
“Foreign-owned businesses seem like they are having, easy partly because they are willing to have insiders working for them. Discriminatory tactics are applied by customs against Batswana, deterring us from importing goods into the country. Even when we do import, we are subjected to exorbitant customs charges, questionable valuations, and unnecessary delays,” he complained.
In his case, Tshwanelang recounted that he was accused of undervaluing goods, fined P10 000 and informed by the BURS that despite settling the fine, the state would seize the goods.
“It is very harsh for a start-up and a small business. When you import something into Botswana, the first thing BURS does is accuse you of undervaluing goods. They will then comb through every little thing and out of frustration, sometimes you just let them use their valuations, where they reject your supplier invoices and then come up with their fee that does not make business sense,” he explained.
Responding to enquiries by The Business Weekly & Review, Keemenao Jappie, the Acting General Manager of Communications at BURS, said the organisation has not received any formal complaints from the public or taxpayers other than what the organisation has observed in the social media space.
“It is therefore difficult to respond in the affirmative or otherwise as BURS does not have any tangible evidence or statistics on such allegations,” he stated.
Jappie clarified that it was unusual for the clearance of goods to be delayed for weeks, citing the Customs Act which mandates that imported goods must be declared within three weeks, provided all necessary information for customs procedures is presented.
“If there are any delays, usually due to BURS unforeseen circumstances or justifiable reasons submitted by the person concerned, the Customs Act provides certain consideration to allow the goods to be imported provisionally. If the system is down, management approves the manual release of goods,” he pointed out.
To minimise collusion, Jappie highlighted that BURS utilises its Central Processing Unit (CPC), which randomly allocates customs declarations through the customs system. This approach significantly reduces the possibility of collusion between customs officers, traders and clearing agents.
“Declarations are randomly assigned, and officers cannot selectively collaborate with specific traders or agents for corrupt purposes, as they have no control over which declarations they handle,” he explained.
According to him, this process enables impartiality as random allocation ensures that no particular declaration or importer receives preferential treatment.
“This impartiality reduces the incentives for bribery, as there’s no guarantee that a bribe will influence the assignment of declarations,” he said.
While small business owners complain that BURS’ stringent and unforgiving bureaucratic processes work against them, Jappie insisted that enforcing legal compliance is paramount for maintaining the integrity of BURS operations and ensuring a level playing field for all traders.
“By enforcing penalties, we aim to send a strong message to deter similar infractions in the future, thereby safeguarding the interests of compliant traders and promoting fair trade practices,” he explained
To simplify tax procedures for small businesses to mitigate the risk of misunderstandings or disputes, Jappie says BURS has recently established a Small Medium Division out of which all issues regarding small and medium businesses would be addressed.
Its ongoing customer-centricity project will also minimise all bottlenecks in BURS services and engage the public on tax laws and procedures to identify challenges.
“BURS is developing and plans to implement simplified customs procedures specifically tailored for SMEs, such as simplified documentation requirements, pre-clearance options (already in place), and expedited customs clearance processes,” Jappie added.
Moreover, BURS says it has developed a digital platform called M-TAX Mobile Application to facilitate trade documentation, customs clearance, and payment processes for SMEs. This provides a portal for submitting trade documents and electronic payments.
