Micro lender Blue Employee Benefits Botswana (BEBB) finds itself on the wrong side with the tax agency, Botswana Unified Revenue Service (BURS) and the industry regulator, Non-Banking Financial Institutions Regulatory Authority (NBFIRA), it has been established.
BEBB is a micro lender with government employees as its clientele. This publication has seen strong worded documents from the two compliance organisations to BEBB. Information gathered by Botswana Guardian suggests that poor working relations between the Chief Executive Officer (CEO), Financial Manager and some of the senior managers have contributed to the company failing to pay tax between 2012 and 2015 and not submitting audited financial results with NBFIRA.
The company is now paying about P500 000.00 each month to clear the debt after its request for a payment model was approved. Some industry players are dissatisfied with the ‘soft’ treatment BEBB got from both BURS and NBFIRA.“It seems the two organisations are lenient with BEBB. The micro lender is having its own internal problems. We are told the finance manager is not working well with his other junior who assists him to prepare the financial reports and be able to submit to NBFIRA and to update with tax payment. It has been the case even with the past finance managers,” said an industry player who did not want to be mentioned.
An employee at BEBB also revealed that things are not run properly at the company hence its failure to abide. The employee who cannot be named for fear of victimization told this publication that staff morale is low at the company as the finance manager and the CEO are not taking the whole team on board in running the company.However, Botswana Guardian can reveal that the company has been subjected to forensic auditing for the past two weeks. In one of the letters dated November 9th 2015 from NBFIRA in which BEBB was fined P35 000.00, the authority explained that the mitigation by the micro lender regarding failure to comply were not satisfactory. The letter from NBFIRA Acting Compliance Director Motsisi Sebonape further states that the micro lender has failed to submit audited financial statements timeously in previous years “and is thus not a first time offender”.
She further warned that the notice of fine does not limit the authority’s right to take further regulatory action.When contacted, BEBB CEO, Favour Marebole dismissed claims of low staff morale and poor working relation between his office, finance manager and other senior staff members. He said the audited financials for the year ending 2014 were signed and sent to NBFIRA on the 15th January 2016. Regarding withholding of tax, the CEO explained, “indeed the company has an outstanding Tax liability which was communicated to BURS as part of a voluntary tax disclosure process in 2014 and was facilitated by one of the major tax audit companies. The total Principal Tax owing as per the latest statements is just over P1m (P1, 025,873.93 to be exact) as at May 2016,” he said, adding that the company has an existing payment plan with BURS that it has been honouring throughout this period since the disclosure. “It is important to note that the efforts shown by the company towards settling its tax liability were at some point commended by BURS to the extent that a waiver of penalty interest was also secured.”
A letter from BURS seen by this publication dated 29th January 2016 informed the company that its tax returns for 2012, 2013, 2014, and 2015 have been selected for audit. Marebole confirmed the ongoing forensic review but rubbished claims that there is mismanagement of funds. “It is company policy that all issues be investigated and until the report is out, we are not able to comment,” he said. He said the company is currently up-to date with its compliance for the Audited Financials of December 2014 and currently working through the Financials of up-to December 2015.
“The current audit for the year ending 31st December 2015 is still on-going. The delay was caused by the fact that the company has recently changed its Loan Management System in August 2015, and there is a process which is on-going to confirm the core asset, being the loan book. The whole of the Finance team is new, having recently joined the department during the last quarter of 2015,” he stated. Said Marebole, “As a result, it is expected that since they joined the company at the end of the financial year and they have to deal with auditors for the financial year they were not there, certain delays will be experienced. An audit process is not an easy and straight forward process and it requires preparation.”
Matshediso Pule of BURS said they are constrained to make any comments on “your questionnaire because we cannot divulge taxpayers information to third parties on consideration of our taxpayer confidentiality policies and laws.”Communications and Public Affairs Manager at NBFIRA, Tapologo Kwapa said as part of their regulatory process they are at liberty to afford entities audit or any form of extension given prevailing circumstances as long as there are no regulatory contraventions. “On the point of charges we are compelled by the Act and our internal policies to make a final determination on penalties by ensuring compliance with the Financial Services Laws,” explained Kwapa.