STAFF REPORTER Cash-strapped Lesotho has proposed 15 percent tax increase on alcohol as one of the measures to increase its revenue, but the proposal has not gone down well with alcohol manufactures, retailers and consumers who are protesting the new tax regime. The Maluti Mountain Brewery (MMB), the country’s only alcohol manufacturing and distribution parastatal company, has raised concern that this tax increase will lead to an increase in price of alcohol and encourage smuggling of alcohol from neighbouring counties. MMB’s Country Managing Director in Lesotho, Sesupo Wagamang, was reported by Lesotho Times weekly newspaper to have said that MMB remains a significant contributor to the economy through taxes and the employment opportunities it offers, as one of the county’s largest employers. “It is however, concerned by the impending negative impact a levy of this nature will have on its business and the liquor industry as a whole,” Wagamang said, adding that there are a number of implications associated with the introduction of this levy, many of which “will put our business in an unfavourable position. The most important of which is the likelihood of consumers switching to informal alcohol and the increased opportunities for smuggling, which is contrary to the government’s goal with this levy.” When presenting his budget speech recently in parliament, Finance Minister Dr Moeketsi Majoro stressed the importance of new Tax Administration Law and added that the government’s revenues for the 2019/20 financial year are expected to rise by 3.4 percent of the Gross Domestic Product (GDP) to reach 46 percent of the GDP. This recovery, he said, will be premised on the introduction of additional revenue-generation measures including the 30 percent levy on the sale of tobacco, a 15 percent levy on the sale of alcohol and three percent value added tax (VAT) on telecommunications. On the other hand, Lesotho Revenue Authority (LRA) has engaged on the new tax payer relations meant to improve tax administration. LRA says when the new tax administration law proposed by government become operational it will set a new path where the tax payer and LRA will have to undertake to establish identity of taxpayers to obtain full information in relation to anything that may affect the liability of a taxpayer. LRA Public Relations Manager Pheelo Mphana has said that the changes shall also help determine tax liability if any, ascertain by inspection, examination, audit or investigation, collect tax, investigate whether an offence has been committed and lastly, enforce LRA remedies or any other administrative measure. “The law will also facilitate for the establishment of more interaction platforms for education of taxpayers, making of enquiries, registration, filing of tax returns, payment of tax and provision of refunds. However, since some of the challenges the organisation is faced with are purely administrative, others are addressed under other laws such as the Income Tax and Value Added Tax (VAT),” he stated. Mphana said to date, in terms of revenue collection, the challenges encountered include identification of taxpayers, limited interaction platforms between LRA and taxpayers, information gathering for tax collection purposes, non-existence of regimes for special sectors and capacity to audit special sectors. “The law places an obligation on such suppliers to register for VAT provided they meet the registration threshold,” he said.