JUDGEMENT SET IN PREVAILING SECURITIES VS TAXMAN CASE

Gaborone High Court Judge Michael Leburu has set judgement in a case in which Prevailing Securities is seeking a review of tax assessment by the Botswana Unified Revenue Service (BURS) to March 3, 2021.

This followed the hearing of the application on Friday.

In court, Prevailing Securities’ counsel advocate Sadique Kebonang said BURS commissioner general abused authority when slapping the company with tax charges in the range of P81,766,882.46.

Through an application seeking a review and setting aside of the tax assessment (VAT and Income Tax inclusive), which BURS imposed on Prevailing Securities in early 2019, resulting in the company being placed under judicial management, Kebonang told court that the tax agency has demonstrated unreasonableness in dealing with the issue.

He argued that while BURS admitted to erroneously treat deposits reflected as turnover, they went ahead and imposed a tax notice of assessment in the sum of P81,766,882.46, which is more than what the company has ever received. “The respondents acted irrationally and unreasonably by using bank statements held by different banks and treated every deposit as income. They admit to that. They even treated bank loans as income, and we say that is irrational,” Kebonang argued.

He said for BURS to have gone further to garnish some of Prevailing Securities’ clients demanding payment demonstrated the unreasonableness and abuse of its power and authority.

Kebonang argued that while the taxman is mandated to collect tax, there is also a public good that is required of them.

On the issues of exhaustion of local remedies, Kebonang said BURS failed to address some of the objections the Judicial Manager has raised through letters, with its conduct in the end forcing Prevailing Securities into judicial management.

Kebonang pleaded with the court to review and set aside BURS’ decision and order a fresh tax assessment of Prevailing Securities taking into account the company’s running costs and expenses within 30 days of the court order.

He argued that the assessment and penalties are excessive and shockingly punitive.

“The company had provided the necessary documents to BURS despite the latter stating to the contrary.

Any penalty imposed, because of that assessment, must be reviewed and set aside. The applicant has offered to pay tax, but a correct one. After all, there is no prejudice suffered by the respondent if they are ordered to reassess,” Kebonang said.

Countering the application, BURS attorney Kealeboga Tshane said the application must be dismissed because it has come out of time.

He argued that the law states that any person aggrieved by BURS tax assessment must seek reprieve within four months or else they must seek leave first.

He said the assessment was based on what was provided to them during pre-assessment period.

“The respondents had provided extension to provide records, but indicated that failure to do so, they would go ahead with what they have,” he argued.

He said the law puts the burden on the taxpayer to provide records to prove that the Taxman is wrong.

He argued that without information, the commissioner general is helpless, and would then treat the withholding of such information as frustration to tax collection.

He said Prevailing Securities has since 2014 to 2018 remitted just P9,248 to the fiscal.

Tshane also said the applicants had failed to exhaust local remedies. While he admitted that BURS would not suffer any prejudice if the assessment is reviewed and set aside, he pleaded with court not to consider the application.