Tax paid by Zhengtai Group can’t be disclosed
Member of Parliament (MP) for Selebi Phikwe West, Dithapelo Keorapetse says it is criminal that government has no idea of the amount of money repatriated as profit, by foreign companies.
He was responding to answers given by the Minister of Finance and Economic Development, Peggy Serame to questions initially asked by Keorapetse.
Keorapetse had wanted the minister to update parliament on the Public Procurement and Asset Disposal Board (PPADB) facilitated government tender bids won by or awarded to Chinese company, Zhengtai Group, in the last ten years.
He wanted the minister to specifically state the number of tenders and their value; the amount of tax the company paid; the amount paid to Batswana contractors as sub-contractors; the amount repatriated as profit and the amount invested locally.
In response, Serame said Zhengtai Group Botswana was awarded four tenders worth P3.4 billion in the last 10 years.
Serame said these projects were awarded inclusive of the Value Added Tax (VAT), meaning the total amount of tenders awarded to bidders included 12 percent VAT.
She estimated the amount of VAT to be P404.5 million. However, she said she was constrained by law to disclose the tax paid by Zhengtai Group to Botswana Unified Revenue Service (BURS).
“In terms of section of Income Tax Act; and section 65 of the VAT, there is a general obligation of secrecy and confidentiality regarding tax matters of individuals and corporates,” the finance minister told parliament.
The minister said she was unable to provide information on the individual company regarding the amount invested locally as statistics on information collected on inward outward investment is at aggravated instead of individual company level.
“There are no foreign exchange controls in Botswana after they were abolished to promote investment. This means that companies are free to invest and repatriate profits after meeting all the legal requirements,” explained Serame.
However, Keorapetse said he was disappointed by the response by the minister.
“Government must distinguish between true investors who bring capital, including human capital, and technology from briefcase companies which come specifically to get government tenders,” he said.
He said it is unfortunate that parliament cannot be appraised on the amount of money the government pays to construction companies that are paid to foreigners versus the amount paid to Batswana.
“What is also bad is that we can’t as MPs be informed of the amount of tax paid by foreign companies. Public interest in the matter outweighs confidentiality ordinances,” said the Phikwe West legislator, adding that it is also sad that naturalized citizens are sub-contracted by their true countrymen in mega projects while the locals remain in the fringes of the economy.