BURS implements controversial track and trace solution
BURS enters into a 10- year self- liquidating agreement Charges reduced from between 25t- 30t to between 5t- 15t per stamp We are protecting both consumers and legitimate businesses - BURS Program to help support excise revenue collections - BURS boss
The controversial multi million Pula fiscal marking and digital tracking solution for tobacco and alcohol products sold in the country, which has pitted Botswana Unified Revenue Services ( BURS) against industry players finally gets underway.
The solution which has been opposed by the industry especially the alcohol industry gets underway after BURS awarded the project to a solution provider, Authentix Pty LTD on a self- liquidating basis for a maximum period of 10 years.
BURS on November 29th 2019, floated a tender for Fiscal Marking and Monitoring Solution of excisable goods under TENDER NO: BURS/ CE/ SER/ 20/ 2019- 20 PROVISION OF FISCAL MARKING AND MONITORING SOLUTION FOR EXCISABLE GOODS FOR A PERIOD OF 10 YEARS.
After a protracted tussle with the industry especially on the charging of the stamps, BURS revealed on Wednesday this week that even though the industry is not fully satisfied at least they have come to an understanding.
As per the tender documents, the winning company was to be allowed to charge up to 25 thebe for stamps that will go on every packet of cigarettes and bottle or can of alcohol sold in the country.
The industry players have been against the stamp charge of between 25thebe to 30thebe per product demanding that there should not be any charge. BURS was in 2020 accused of rushing out a tender for the ‘ Track and Trace’ system for cigarettes and alcohol worth almost P1billion at the beginning of December 2019. International and local companies had until the end of January 2020 to bid for the work which will involve every tobacco and alcohol product sold in the country being branded with a new tax stamp.
BURS Customs Services Commissioner, Segolo Lekau revealed this week that despite having had a standoff with the industry especially the alcohol industry they have made progress in their engagement.
He explained that they have been engaging on the matter since 2016 with the general industry trying to find “a win- win solution” and they decided to settle for the track and trace system which will benefit both the industry and the consumer.
“Initially we were at 25thebe to 30 thebe per stamp. We have now moved to 5thebe to 15thebe per stamp and we believe this is a reasonable price. It works for both the industry and the consumer.
“The solution will enable consumers to check if the product is duty paid and will help also those who are running the business legitimately. Exercise duties are pretty expensive. We need a solution and that solution is the track and trace system. We need to protect Batswana from illicit revenue,” Lekau said. Lekau who is the former acting Commissioner General of BURS explained that the attitude of the citizens and that of the industries or businesses should be to pay tax so that they help the country to progress to a highincome country status.
He said even though the industry is not fully convinced they are currently on the same page following the reduction of the stamp charges.
Controversy has been following these tender as in 2020 Botswana Guardian uncovered information that during a 2018 stakeholders’ presentation, BURS indicated that following the successful publishing, response and evaluation of submitted bids, it decided not to proceed with the tender due to a number of reasons.
Subsequent to that Consultancy company Sovereign Border Solutions ( SBS) was engaged to re- scope and amend the Invitation to Tender ( ITT) to align with BURS requirements for scope, cost and technical feasibility of the solution.
SBS specialises in Customs, Excise, Track and Trace, International Trade, Customs Risk Management, Revenue Enhancement, ICT, Trade and Customs Solution Design, Single Window.
Fiscal Marking and Monitoring Solution will cover all tobacco and alcohol goods produced in, or imported into Botswana, however, the solution will have different requirements to cater for the different categories of goods, such as beer, wine, spirits, and cigarettes among others.
The solution design for fiscal marking and monitoring of excisable goods can be split into two different scenarios being Fiscal marking of local or foreign production of excisable goods intended for local ( Botswana) consumption, and Importation of marked and unmarked excisable goods for local consumption. BURS Commissioner General, Jeanette Makgolo explained that the 10 years being a maximum means it can be changed anytime. She revealed that self- liquidity means BURS will not be paying but the service provider will be recouping from providing the service.
She told the media this week that the introduction of this solution was prompted by among others the influx of smuggling of excisable products which was exacerbated by high duties and levies on these products, the rife counterfeiting practice in the market with BURS unable to establish whether the products are being smuggled or being manufactured within the country and industry complaints that other players in the market are under- pricing the products hence possibilities of smuggling.
“The new digital monitoring program, once fully implemented, will be transformational for Botswana and help support excise revenue collections benefiting all citizens and compliant industry players alike,” the Commissioner General said.
It is also expected to ensure that legitimate duties and taxes are paid on all of these imported and manufactured products and provide a fair and level playing field for all the compliant manufacturers, importers and traders while protecting consumers from often harmful and substandard illicit and smuggled goods.
The Solution provider, in collaboration with BURS, has commenced process of conducting industry visits to familiarise with industry processes and technologies to ensure the solution fits seamlessly into the industry production lines.