MASERU - The plummeting domestic and regional economic conditions due to the COVID-19 pandemic is killing the principal drive of the Lesotho Revenue Authority (LRA) which is to collect tax revenue. The LRA was established by Act of Parliament in 2001 and became operational in 2003, principally responsible for assessment, collection, and remittance of public revenues to the government.
business
Oct. 1, 2020
NEO SENOKO
3 min read
No LRA without businesses - Khasipe
The authority seeks to enhance the efficiency and effectiveness of revenue collection and provide an improved service to the public. Such efforts are, however, being killed by the COVID-19 pandemic.
In the past financial year, LRA missed its annual revenue target for the first time since 2018, a condition which was largely blamed on the economic meltdown that swayed the 2019/20 financial year and the outbreak of the coronavirus disease.
Corporate Income Tax collections were at their lowest and employment also stagnated in the same financial year. Against the target of M7 554 billion, the revenue authority only managed to remit M6 962 billion. The net collections reflected a deficit of M591.85 million (-7.8 percent).
By gross amounts, LRA collected M7 864 billion, representing M162 million (2.1 percent growth) from the M7 702 billion collected in the 2018/19 financial year. With the pandemic continuing to devastate the world economies, it is clear the LRA may reach the lowest point in revenue collection this financial year.
The LRA Commissioner General Thabo Khasipe has told this publication in a brief interview that the authority will definitely fail if businesses are not functioning.
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“COVID-19 kills the economy and that means no tax revenue for LRA because we collect from businesses. If they die, LRA fails,” Khasipe said on Monday. He went on to deliver a chilling warning that the spread of the pandemic also means that even the Southern African Customs Union (SACU) collections will suffer and decline drastically.
“Also, SACU revenue which is collected by the five-member states when trading with the rest of the world will be affected. Without adequate international trade due to the pandemic, there is no money collected in the form of tariffs. No SACU money to share by member states means no revenue for LRA and the government of Lesotho,” the Commissioner-General added.
He emphasized the importance of dealing with the pandemic, citing that there is no LRA unless the pandemic is dealt with accordingly. He said no job is better than that of fighting the pandemic if the country is to avoid the economic Armageddon ahead.
Khasipe’s comments came shortly after he was appointed the Chief Executive Officer of the Disaster Management Authority (DMA).
The appointment is on secondment for 36 months and will afford Khasipe full responsibilities to set up a new structure of the DMA, recruit personnel for the office, train staff, and oversee its operations.
The appointment left many people frustrated, arguing that it is wrong for Khasipe to hold more than one senior position while other people are waiting for such opportunities.
The government, however, showed that Khasipe will not be paid any salary and other benefits from the DMA position as his appointment is a national crisis response to utilize resources that include financial and human capital that is already within reach from all sectors of government. Khasipe will still enjoy full benefits as the LRA Commissioner General.
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