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ITD AFRICA CONFERENCE ON TAXING MICRO AND SMALL BUSINESSES

ITD AFRICA CONFERENCE ON TAXING MICRO AND SMALL BUSINESSES “4. WAYS TO PROMOTE OR ENFORCE THE REGISTRATION OF HIDDEN TAXPAYERS” PRESENTED BY: L. Magama BOTSWANA. WHY REGISTRATION ?. Registration is a means by which tax administration is able to effect control over taxpayers

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ITD AFRICA CONFERENCE ON TAXING MICRO AND SMALL BUSINESSES

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  1. ITD AFRICA CONFERENCE ON TAXING MICRO AND SMALL BUSINESSES “4. WAYS TO PROMOTE OR ENFORCE THE REGISTRATION OF HIDDEN TAXPAYERS” PRESENTED BY: L. Magama BOTSWANA

  2. WHY REGISTRATION ? • Registration is a means by which tax administration is able to effect control over taxpayers • Identify tax base • Classification • Segmentation • Certainty; To understand whom you are dealing with • Unique identification • Easy administration of Taxpayers

  3. REASONS FOR ENFORCING REGISTRATION • The unwillingness to pay taxes; evasion • Taxpayers ignorance; without understanding the obligation to pay there will be no registration • Revenue Authorities’ mandate to collect revenue; without registration revenue collection would be cumbersome

  4. WAYS TO BRING TAXPAYERS INTO THE TAX NET The following strategies are effectively used in identifying unregistered taxpayers: • 1.EXCHANGE OF INFORMATION; currently data is received from: • Botswana Meat Commission (BMC); BURS receives information on sale of cattle per tax year by individuals. • Banks; information on interest for individuals • Registrar of Companies; upon registration information is immediately sent to BURS

  5. 1. EXCHANGE OF INFORMATION Cont…. • Deeds Registry Division; all property transfers are cleared by BURS • Department of Building and Engineering Services; it forwards all payments certificates to BURS • Medical Aids; forwards claims/bills by doctors to BURS • Law Enforcement Agencies; forwards information they consider to have tax implications • Department of Road Transport and Safety; BURS is linked to its Vehicle Registration System, identifies buyers of expensive cars

  6. 2. FIELD SURVERYS • Intelligence Officers search for unregistered taxpayers on field • Specific Industries or • Specific location

  7. 3. REQUIREMENT FOR TAX CLEARANCE • All applications for public tenders must include a tax clearance certificates issued by BURS

  8. 4. TAXPAYER EDUCATION • To ensure less ignorance on tax matters, seminars, workshops, publications, trade fares etc are used to disseminate information,

  9. CHALLENGES • Lack of a robust Intelligence Database • Absence of IT linkage with most providers of information slows down data collection • Reluctance from the private sector to provide information freely • Lack of compliance after registration • Difficult in location these businesses as they are too mobile

  10. CHALLENGES Cont… • Poor record keeping by SME

  11. OPPORTUNITIES • Government initiatives to grow the SMEs • Eg. Local Enterprise Authority (LEA), Citizen Entrepreneur Development Agency (CEDA) • Existence of associations in some sectors of SMEs; BURS may link with them

  12. THANK YOU Collecting Taxes for Botswana's Development www.burs.org.bw TPE

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