Leemisa Thuseho 

LESOTHO National Development Corporation (LNDC) in collaboration with the International Institute for Sustainable Development (IISD) held a two-day workshop to train ministries and parastatal officials on the use of tax incentives to attract investment in Lesotho. 

The high-level workshop dubbed Rethinking the Design, Use and Governance of Incentives to Promote Sustainable Investment in the Kingdom of Lesotho was held at AVANI Lesotho this past week. 

The workshop was followed by a series of bilateral discussions between the IISD team of experts and various ministries. 

The IISD is an independent, non-profit and non-governmental research organization founded in Canada in 1990,?with the aim of accelerating solutions for a stable climate, sustainable resources, and fair economies.? 

Tax incentives?are?a government measure intended to encourage investors and businesses to invest in a country by reducing the amount of taxes payable.?? 

Through its tax incentives and sustainable investment program, IISD provides governments from developing countries like Lesotho with in-depth, multi-disciplinary support to evaluate and reform tax and non-tax incentives as an investment promotion tool. 

The LNDC General Manager?for?Legal and Administration Services, Florence Motoa, said the they had invited?the?team of experts from IISD to capacitate Lesotho. 

She said the other objective was to determine the potential scope of a long-term technical assistance program for Lesotho on the design and use of tax incentives as well as reforming broader legal frameworks for sustainable investment. 

She said the?knowledge?gathered from the workshop and more upcoming engagements?with bodies like IISD would help the country make well informed decisions regarding incentives?to attract more and maintain already available investors. 

“The world is evolving as far as tax incentives are concerned and we can’t be left behind as a country, we have to review our policies to see if they are still relevant in today’s world. Failure to do so can lead to the government losing a lot of money that it has to get through tax collection.” 

For her part, IISD Director?of?Sustainable Investment, Suzy Nikiema, said the workshop was part of ?ongoing collaboration with Lesotho?to enable?long-term technical assistance on?rethinking and reforming investment incentives. 

“It is important for the country to reform its incentives packages to attract the quality of investment it needs, not only the quantity,” Nikiema said in a side interview with the?Sunday Express. 

“However, this has to be done in an appropriate manner which will still mobilise enough revenue… the country has to make sure that incentives given are necessary and economically sound, and would really help the country meet its objectives. 

“So we help countries like Lesotho to be able to do such assessments, to redesign and make informed decisions in an attempt to bring investments that bring social, economic and financial benefit to the country.” 

Ms Nikiema said their visit to Lesotho was timely because some developments were happening at global level, particularly with global minimum tax. 

The global minimum tax (GMT) is an internationally agreed-upon minimum rate of taxes that would be paid by large corporations. 

She said next they would assess and review the existing incentives, and legal instruments being used in the country before making recommendations.