Income tax and VAT surpasses highest recorded margin
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By Lineo Ramatlapeng
Lesotho’s income tax and value-added tax for the 2020/2021 financial year collections have exceeded respective target margins over the past five-year period from 2016 to 2021.
Lesotho Revenue Authority’s Commissioner General Thabo Khasipe at the launch of the 2021/2022 financial year filling season and 2020/2021 revenue collection outcome said the exceeded margins were much welcome amid the COID-19 effected harsh economic conditions.
The authority’s board Chairperson Robert Likhang said their role as a board is simply to provide strategy and policy oversight over the organization and to ensure effective operational performance according to the mandate given to them by the establishing statute.
“The performance report survived a very difficult economic environment, made worse by the COVID-19,” said Likhang.
Khasipe said the income tax collections were supple for most of the year, declining pay-as-you-earn collections from the private sector for mostly below 2019/2020 collections account for notable deficit.
Value-added tax collections contracted in 2020/2021 financial year due to COVID-19 restrictions affecting global supply chains and negatively affecting domestic Value added tax collections, Khasipe said.
“Monthly domestic VAT collections averaged M200 million in 2020/21FY, below M230 million average for 2019/20FY,” said Khasipe.
Khasipe said specific to the first quarter, value-added tax missed a target in the first quarter of 2020/ 2021 financial year largely explained by the introduction of lockdown resulting in businesses in essential services remaining in operation, thereby significantly contracting the economy.
He said the impact was mostly experienced in May missing the set target by 77 percent.
Khasipe said the overall target for 2020/2021 while relatively lower than targets set for recent years, it was however exceeded by 13 percent noting the largest gain not recorded in the past 10 years.