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Letshego’s tax issues unresolved

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Letshego's tax issues unresolved

Letshego Holdings Limited, the listed Pan-African financial services group, still has unresolved tax issues emanating from prior years that require audit attention – this, according to the group’s auditors, Ernst & Young Botswana.

In its latest financial results, the group, which has several subsidiaries across the continent, revealed it had a provision of P45 million in an East Africa subsidiary, P40 million in the West Africa subsidiary and P22 million for the Botswana subsidiary.

All three have potential current income tax liabilities arising from previous years.

Letshego’s auditor’s explained this was a result of ongoing tax revenue authority audits and tax health checks initiated by management across the group.

As of the reporting period, the group says it has recognised a deferred tax asset of P145 million, which comprises tax losses and other temporary differences identified between the carrying amounts of assets and liabilities for financial reporting purposes.

Letshego says the utilisation of these deferred tax assets is subject to the group generating sufficient taxable income in the future to offset these tax losses and temporary differences.

“This estimation uncertainty is further increased by the ongoing volatility in geographical sectors in respect of economic planning in which the group operates,” the group said in a statement.

Meanwhile, Letshego says at this stage it cannot predict the credit losses that could happen.

Loans and advances account for 83 percent of the group’s total assets and the group says the estimation of credit losses is ‘inherently uncertain’ and subject to significant judgment and estimates.

The situation is further compounded by the ongoing volatility created by the Covid-19 virus, which has caused much disruption to almost all geographical sectors in which the group operates.

Certain subsidiaries are said to have been experiencing losses for a period of 12 months now, resulting in an indication of impairment for both the investment in the subsidiary and the loans in the subsidiaries.

The group has also extended loans to subsidiaries amounting to P2.9 billion in 2019 compared to P3.2 billion in 2018.

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Battling for booze

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Battling for booze

Liquor industry wants alcohol sale ban lifted

Botswana Alcohol Industry Association (BAIA) is lobbying for government to follow the example of neighbouring countries and lift the ban on alcohol sales.

Their main reasoning being that citizens who live close to the border may be tempted to sneak out of the country in their desperation to buy liquor. They note this would be detrimental to the economy as well posing a serious health hazard.

The Association Chairman, Mothusi Molokomme told Voice Money they believe the ban – in place since 27 March – should be lifted to allow the public to purchase alcohol and consume it at home.

As much as the main focus is for bottle stores and wholesalers to open for trade, Molokomme revealed they also want bars to be opened, noting they are the only centres of distribution in some of the country’s remoter areas.

He stressed that bars should be allowed to operate on a ‘takeaway’ basis but only after they satisfy Covid-19 prevention protocols.

“The main worry is that there will be loitering around the bars. But it is our belief that operators will strictly adhere to the regulations and allow for takeaways only,” stated Molokomme.

The Chairman pointed to the recent surge in homebrews as indication that the ban should be lifted.

During the period of lockdown, the police have recorded escalating cases of homebrews, which in some instances have even led to the loss of drinkers’ lives.

“There is also a regional factor because South Africa has announced it will be opening next week. Namibia is opening as well and Zambia has always remained opened and because of our porous borders, we may see the illegal coming in of liquor,” continued Molokomme.

He said areas located along the borders of these countries pose a threat to liquor contraband.

While the association advocates for the ban to be lifted, he says as the industry, they will also intensify their message for safer consumption and promote good behaviour among consumers to exercise precautionary measures.

“We are hoping that we will reach an agreement. It will be difficult to convince government when it comes to opening of bars, but we cannot sideline the bars because, in some areas they are the only available points of sale,” reiterated Molokomme, who doubles as the Managing Director of Distell Botswana.

The association was scheduled to meet with the Minister of Investment, Trade and Industry (MITI), Peggy Serame this week to map a way forward regarding the sale of alcohol.

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Business

Crafting a new life

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Crafting a new life

The Enterprising Welder Me and My Business

Absorbed and happy in his work as a car mechanic, an unlikely request from a client three years ago changed the course of 35-year-old Bokamoso Selthabi’s life forever.

The self-taught welder now designs and makes various products from metal, including troughs, trailers, cages, kraal fences and other farm implements.

Having initially set-up shop in the North West of South Africa, his home of three years, the Morwa native retraced his steps back to Botswana to continue Bucha Rest Welding.

Recalling the meeting that altered his existence, Setlhabi told Voice Money he was working as a mechanic when a customer asked him to build a trailer for him.

“I made the product for him. After that he brought two more guys wanting my services. From there it grew into a fully-fledged business,” he explained.

“The business has now been running for two years based in South Africa. It is only at the beginning of this year that we relocated to Botswana,” continued the multi-talented craftsman, adding he briefly explored the Namibian market as well.

While he is still new to the local market, with much of that time blanketed by Covid-19 restrictions, Selthabi admits he is yet to reach a point where he can say business is as good as it was in South Africa.

“So far it has been a bit difficult locally. Some of the products that we do like metal kraals are still not highly rated here but we are working hard to market such products as a good alternative to wooden kraals,” he noted, a steely determination evident in his tone.

Setlhabi explained that one of the perceived disadvantages of products like metal kraals is because the metal conducts heat.

However, he points out that this can be overcome by simply applying paint.

“The good thing about it is that it is durable and lasts longer than other materials used to construct kraals,” he highlighted.

Despite the current low uptake of his products, the enterprising welder is optimistic his fortunes will soon turn around.

“It is promising because, when you work with customers who are not used to what you are doing, you have to carry out extensive marketing of your products. We hope when life goes back to normal after the pandemic there will be some improvement,” he said, adding that items such as feeding containers have proved popular and are in demand.

“We also have customers waiting across the country,” he added.

Other challenges – and the one Setlhabi describes as his biggest – is copycats who attempt to duplicate his work ‘but often fail to match my skills’.

“We have social media pages where we post our products. People would want to do exactly the same but often do not succeed because our designs are unique and the quality is top-notch,” said the National Craft Certificate (NCC) holder proudly.

As the business is still at infancy stage, he has engaged one person to assist but hopes as the enterprise grows he will be able to employ more.

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