business

March 29, 2021

STAFF REPORTER

3 min read

Motor dealers cry foul of hiked licensing fees

Motor dealers cry foul of hiked licensing fees

The Minister of Trade and Industry, Dr Thabiso Molapo

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MOTOR Dealers who sell imported Japanese vehicles are not happy with the decision by the Ministry of Trade and Industry to increase the car dealership licensing fee from M600 to M300 000 per year.

According to correspondence from the ministry, some of the changes made include increasing quota for each motor dealer from 100 units to 250 units per year, subject to review upon exhaustion before year end.

The ministry has also ordered that vehicles imported into Lesotho for sale should not be older than eight years.

It further showed that roadworthy certificates will be obtained in Lesotho by motor dealers before sale to customers.
One of the car dealers Lebohang Moea who operates in Maseru said the decision is not fair on them as the new payments are too steep; adding that they now have to purchase only 250 vehicles yet previously there was no limit.

“There was no limit when we were paying M600 license fee but now that the fee has been steeply increased, we are permitted to buy up to 250 vehicles. In the past, a dealer would buy as many vehicles as they want depending on their financial muscle, what is happening now is not fair to us at all,” he said.

Mr Moea took a shot at the Minister of Trade and Industry Dr Thabiso Molapo, accusing him of carrying out his party’s mandate by oppressing Basotho.

A Maseru businessman who also serves as an accountant and business advisor for local car dealers, Makhetha Thaele said there are about 70 motor dealers who were not been consulted about the increase of the license fee, which he contends is too hefty.
Due to this, he said some dealers are closing down their businesses and in the process a lot of employees are losing their jobs.

“So far, four car dealers have closed shop and 40 workers have lost their jobs,” Mr Thaele also said.

This, he noted has resulted in government losing revenue and profits for businesses, adding that the buying power has also decreased, affecting the country’s economy.

“This does not only affect economy but relations of Lesotho and foreign direct investors too and if the investors have no confidence in the country then Basotho who were expecting to get new jobs will remain unemployed and if there are no jobs, then the selling and buying powers of the country will decrease, resulting in low production and decrease in Gross Domestic Product (GDP) which will lead to sluggish economy as well as poverty,” he explained.

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Mr Thaele was quick to show that there is no dealer who can afford to pay the M300 000 license fee, adding that even if the move was meant to encourage Basotho to start their own dealership businesses, it is not viable with that kind of fee.
“Vehicles which are eight years old and below are very expensive, hence the dealers are going to need a very steady working capital to continue with business, which is not easy to raise in this COVID-19 era,” he also said.

For his part, Dr Molapo refuted allegations that he is doing this as mandate from the Basotho National Party (BNP), promising to hold a media briefing soon where he will give full details of the issue.

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