Bereng Mpaki
THE Lesotho Revenue Authority (LRA), under the leadership of Commissioner General Thabo Khasipe, has met its revenue collection targets for the first time in two years.
The tax authority collected and remitted to the government M6, 984 billion which was M114 million more than the set target of M6, 869 billion for the 2018/19 financial year.
The tax authority has consistently failed to meet its targets in recent years. It remitted M5, 989 billion in the 2017/18 financial year and this was M600 million target.
The year before that, the LRA missed the revenue target of M6, 597 billion by M400 million or 6, 4 percent.
Mr Khasipe, who announced the latest results last night in Maseru, said he was relieved that the authority had finally overcome its constant failure to meet its revenue collection targets.
In an interview with the Lesotho Times on the sidelines of the press briefing which also marked the official beginning of the tax filing season and launch of Lesotho Tax Modernisation Project, Mr Khasipe attributed the positive change in fortunes of the LRA to the new operational strategy the authority implemented during 2018. Among other things, the LRA now employs a friendly approach to taxpayers as opposed to a heavy-handed approach to enforce compliance.
“Our revenue collection performance has been not good for the past two years in fact it has been deteriorating as we missed the target by M400 in 2016/17 and by M600 million in the 2017/18 financial year.
“But we are happy that this time we met the targets due to the new strategy that we implemented.”
“This means we have moved on from the deficit to a surplus situation due to our new strategy which emphasises the closer relationship we are cultivating with our clients. These closer relationships make it better for them to be tax compliant and we will continue to implement them in this new financial year so that we can improve on our current performance.
“The Voluntary Disclosure Programme (VDP) is also one of the initiatives we introduced that have played a significant role in this year’s performance, as on average we were able to collect about M2 million extra revenue through it per month.
“Another factor is the simplified business tax (SBT) system which has enabled us to bring many smaller enterprises into the tax base. This initiative, which removed the complex filling process to pay tax, made it easier for more businesses to pay tax.
“For the first time, public transport operators were able to pay significantly more because we asked them to pay a flat tax rate where they did not have to engage accountants to prepare their financial books.”
He added that there was also an improved performance in the income tax category which grew by 19 percent. The income tax category was boosted by revenue collected from the mining and quarrying industry which increased by 123 percent during the 2018/19 financial year.
On his part, Finance minister Moeketsi Majoro congratulated the LRA team for “a job well done”, noting that this year’s good performance erases the unpleasant performance of the previous years.
Dr Majoro said it was encouraging to see the revenue collection system “repairing itself given the heightened need for more revenue mobilisation efforts for the purposes of developing the country”.
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