MASERU — The Lesotho Revenue Authority (LRA) surpassed the revenue collection targets set by the government for the 2009/2010 financial year by 11.13 percent, Commissioner-General Thabo Letjama said on Wednesday.
The LRA collected taxes worth M2.809 billion which was M281.3 million more than its target of M2.53 billion.
Letjama handed the cheque to Finance Minister Timothy Thahane on Wednesday.
Letjama said income tax, money paid by workers from their salaries to the government, performed beyond target.
The collections beat the target by a whopping M310.8 million.
Income tax is the biggest source of government revenue.
Letjama said value-added tax (VAT) had performed M29.5 million below target because of the economic downturn that hit Lesotho last year.
“We indeed saw the effect of the economic downturn in our country when some companies in the textile industry closed their firms and some people lost their jobs,” he said.
In the region some revenue administrators revised their projections downwards when the reality hit that economic performance would not be up to the initially expected levels, Letjama said.
“Indeed in our own context the inflation rate and the economic growth rate turned out lower than was expected,” he added.
“VAT became the first tax to detect this economic under-performance.”
He however said although VAT had performed below target their analysis shows that it had “performed relatively well” under the circumstances.
Letjama said the surplus in revenue collection for the past financial year can be attributed to more taxpayer education initiatives, broadening of the tax net and intensified debtor management.
He added that the LRA revenue collection duties are going to expand this year after it was given the mandate to collect revenues from other government departments.
For this purpose a team chaired by Finance and Development Planning principal secretary Mosito Khethisa and made up of senior management from the LRA has been established, Letjama said.
Thahane said good resource mobilisation and efficient collection of revenue will make it easier for the country to finance its operations.
“We must strive to finance ourselves as a country and not depend on handouts,” Thahane said.
“We should depend on handouts only to supplement our revenues during hard times.”
Thahane added that the revenue collected would go a long way in financing the 12 percent deficit anticipated in this year’s budget.
“I must commend the LRA for upholding a high standard of integrity by not tolerating any kind of fraud,” he said.
Thahane stressed the urgent need to fight corruption as “it is equivalent to stealing from the hardworking population and using funds for personal purposes which do not improve the economy of the country”.
He added that part of government deposits and bonds will finance the current budget deficit of about M2 billion in this financial year.
The government is expected to start issuing bonds in September after consultations with the Central Bank of Lesotho.