As the matter involving allegations of tax evasion by the founding head of the Directorate of Intelligence and Security Service (DISS) gains traction, the Botswana Unified Revenue Services (BURS) has lined up financial transactions from a number of Botswana’s big boys club who dealt with Isaac Kgosi between 2008 and 2019, investigations by The Business Weekly & Review have revealed.
This is the matter before Justice Reuben Lekorwe of the Lobatse High Court where “Mzico,” as Kgosi is otherwise known, wants a declaratory order, which basically means an order to provide certainty regarding unclear legal issues that may arise in court.
Kgosi asserts that he owes BURS nothing. Through his replying affidavit, Botswana’s erstwhile top spy argues that he does not owe BURS P10 million that the taxman claims he does. However, BURS hold that between 2008 and 2019, Kgosi failed to declare his several sources of income and therefore owes them an amount of P10 million from them.
Documents seen by The Business Weekly & Review show that in respect of the 2008 tax year, BURS claim that “an amount of P155 000 is not accounted for in terms of my (Kgosi) tax returns for the year”.
But Kgosi says he can explain. “The P45 000 was furnished to the said attorneys, Collins Newman & Co by my erstwhile (business) partner, Mr. L. G. Nchindo who is now deceased,” Kgosi wrote in his affidavit.
“I was in partnership with the late L. G. Nchindo and we had agreed to purchase property on auction (and) Mr. O. Wakwena was briefed to represent us at the auction. He proceeded to the auction on 16 May 2008. We were fortunate that ours was the highest bid that was accepted. A deposit plus the deputy sheriffs 2.5 percent commission was paid by me.”
According to Kgosi, he later collected P45 000 and paid attorneys Collins Newman & Co with it.
ENTER LIVER TEMBO
Kgosi says the amounts of P70 000 and P40 000 were refunds received from Liver Tembo, another of his key associates then, “in respect of amounts paid for a building project”. However, at this point, “Mzico” loses a recollection of events and says he cannot explain what happened to P5,745.45 in cash and cheques because these are small amounts “and the time lapse is such that I am unable to remember what these amounts were for”.
Therefore, he forms the view that he did not submit an incorrect tax return in 2008.
According to the Botswana’s former topmost spy, a loan of P400 000 was secured from Nchindo in 2009. Kgosi avers that the money was used as his contribution towards the Sentlhane farm project and that he deposited it with Attorneys Collins Newman & Co.
According to the narration of the once feared top spy, he cannot divulge much about his company, Silver Shadows, and amounts received in his official capacity as the head of DISS because it is “a sensitive security matter”. But he says Silver Shadows had “extensive” shareholding in listed companies like Choppies, BTCL, Letshego and Sefalana.
Furthermore, Kgosi states that he received P298,197.75 from Corporate Services so as to facilitate foreign operations and that these funds were from a foreign government.
Again, Kgosi denies any tax liability in the said year. In a lengthy court document, he argues that in 2010, he received funds from Liver Tembo of LT Associates. According to Kgosi, the funds were obtained as refunds due to misuse of funds and are capital in nature.
Similarly, he maintains that he cannot remember small amounts that reflected in bank statements as they moved from one account to another but he argues that he did not breach the statutory time bar of Section 84.
KABELO BINNS AND KGOSI
Investigations by this publication show that in 2011, some amounts were deposited by Kgosi into the BH Botswana account. In his defence, Kgosi argues that the said entity was not accepting cash at that point in time. He says he deposited cash into their account and also received cash deposits yet again from LT Associates as refunds due to him.
Accounting for the transaction with PR and communications expert, Kabelo Binns, Kgosi says in his affidavit: “Mr. K Binns is not an official of the DISS and these amounts are refunds of travel expenses, which were credited to my account by him.”
He adds that refunds are capital in nature and that these were refunds of money he expended on official trips. He gives the same explanation when he contends that amounts deposited by Binns were explained before and are refunds in capital amounts that cannot be taxed.
According to “Mzico,” amounts paid to Northside Primary School were paid from his personal account and were not inappropriate. With regards to his small stock, he denies purchasing any stock in the tax year 2013.
TRANSACTIONS WITH RAM, FAROUK AND KEBONANG
Relating to the 2014 tax year, “Mzico”- who denies any wrongdoing – points the court to “affidavits from Mr. Farouk Ismail, Mr. Ramachandran Ottapathu and Mr. Sadique Kebonang regarding the Discovery vehicle and other vehicles.” He avers that he used dividends received to make the purchase.
OP LANDROVER PROCUREMENTS
Information seen by The Business Weekly & Review is an account for the 2015 tax year. This time around, Kgosi says Land Rovers B 741 BAI and B 797 AZO are property of the Government of Botswana purchased for official purposes and that they were paid for through the Office of the President in 2014 and 2015. Amounts paid in 2016, which include school fees at Northside Primary School, thatching grass bought and goat feed bought from South Africa, among others, were from his personal savings, says Kgosi.
ENCOUNTER WITH RICHARD MILES
For the tax year 2017, “Mzico” objects that he owes any tax liability because he paid school fees from his personal savings. However, he then draws the court’s attention to an affidavit by Kebonang detailing the purchase of motor vehicle registered B 464 BEA. “I deny knowledge of Zhengtai Group,” he says. “Mr. Farouk Ismail is a business partner of mine and he also assisted with a loan in respect of the motor vehicle purchase.”
He goes on to state that he purchased the Gondalis livestock with an overpayment received from former minerals minister Kebonang. “The other livestock referred to in the spreadsheet of the respondent (BURS) (is) a loan of livestock from one Richard Miles of Oxford Farm,” Kgosi avers.
Represented by Thabiso Tafila Attorneys, Kgosi argues through his lawyers that cattle sales are free of tax under Section 30 of the Income Tax Act. Contrary to BURS accusation that he evaded tax in 2018, he maintains that he paid for his procurement of DAF trucks after tax amounts. Similarly, other transactions involving payment of school fees at Northside Primary School and payments made to BH Botswana are defended by the former head of DISS. Kgosi denies tax liability for 2019. He says his tax returns were not due at the time of signing this affidavit.
In what promises to be a legal marathon, Kgosi and BURS are at each other’s throats over contentious millions of pula. BURS wants P10 million from Botswana’s erstwhile topmost spy while Kgosi is insisting that he owes the taxman nothing.