ATAF suggests tax relief measures

Kabelo Adamson

The African Tax Administration Forum (ATAF) has in the spread of the Covid-19, suggested a few measures on how tax authorities can deal with the current situation.

While the local tax authority, Botswana Unified Revenue Service (BURS) has put in place its own measures, the body of which BURS is a member has put forward its own suggestions.

One of the suggestions made is the extension of deadlines for filing tax returns to accommodate the disruption taxpayers may be facing due to the pandemic.

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However, the organization says the extension should be based on the compliance level of the taxpayer but has suggested that all taxpayers be considered, as the extension will play a dual role of easing the burden on taxpayers and limiting the transmission risk of revenue staff where there are limited digital channels or none.

The other measure that has been suggested to the tax authorities to consider is to grant taxpayers flexible payment plans like monthly or bimonthly installment payment for a certain period beyond the due date.

This ATAF has said would ease some of the economic burden exerted by Covid 19 on taxpayers.

The body says the flexible payment plan may also include the suspension of payments for a certain period.

Some of the factors to be considered when offering flexible payment plans include compliance history of the payer and economic sectors.

Tax authorities have also been advised to suspend penalties and interests for late filings by taxpayers.

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Furthermore, authorities have been advised to consider temporary tax rates reduction as another way to ease the economic burden brought onto the taxpayers by the pandemic, which has so far claimed over 100,000 lives globally.

However, in considering this measure, ATAF is of the view that the jurisdiction should be clear on the period covered by the reduction and the legal framework to safeguard such.

ATAF has cautioned that in case of consumption taxes like value Added Tax (VAT), benefits may not reach the intended public as suppliers can absorb the reduced rate as part of the price mark up in jurisdictions where there is no price control.

BURS, meanwhile, has announced it will allow for deferral of 75 percent of any two quarterly payments between March and September 2020 for businesses with deferred payments to be repaid from March next year.

The local tax authority has also reduced VAT refunds period from 60 days to 21 days.

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