Bereng Mpaki
THE Ministry of Trade and Industry has temporarily suspended issuance of trader’s licenses and import permits for used motor vehicle dealers to investigate possible corrupt practices in the industry.
Trade minister Thabiso Molapo this week said some of the issues they were investigating include duplication of trading licenses by some second-hand motor dealers.
He said they suspect that many dealers were evading tax by employing untraceable payment methods, which make it difficult for the Lesotho Revenue Authority (LRA) to collect revenue.
Some of the dealers do not have local bank accounts and there are fears that this is another way that they are evading tax since the LRA cannot tell how much they are making.
Dr Molapo said the investigation began last week and is expected to establish the cause of the rot within the trade.
“There are serious issues within the second-hand motor vehicle trade which we must straighten out,” Dr Molapo said.
“For example, there are different dealers who have been found to be sharing one trader’s licence for as many as six businesses.”
He said duplication of licences might be due to the ministry’s inefficiencies and called for introspection.
“So, to carry out thorough investigations, the ministry has imposed a moratorium on the issuance of trader’s licences and issuance of import permits to traders. This is meant to give the ministry an opportunity to investigate these issues without interruption. The investigation is on-going and normal operations will soon resume once it has been completed.”
He however, said individuals or in groups were allowed to continue importing second-hand vehicles.
Dr Molapo said social media allegations that the moratorium is meant to shut down the second-hand motor trade were unfounded. He however, indicated that one of the issues they are investigating is how some foreign dealers are working in Lesotho without work permits.
For his part, the director of the One Stop Business Facilitation Centre (OBFC), Monaheng Monaheng said while investigations were on-going, duplicate licenses could be attributed to manipulation of their licensing system.
The leaked memo, which generated a lot of views on social media about the government’s decision to suspend importing of used vehicles and issuing of licenses reads as follows: “Please be informed that the minister has decided to impose a moratorium on the issuance of import permits for used motor vehicles, coming from outside the Southern African Customs Union (SACU) countries”.
“Further, the minister has also decided to impose a moratorium on the issuance of new trader’s license for motor dealers. The moratorium is effective from 15 September 2020 until further notice.”
Attempts to get a comment from the Import Car Dealers Association of Lesotho were fruitless yesterday.