THE National Assembly has passed the Lesotho Revenue Authority (LRA) (Amendment) Bill 2021, which seeks to change the name to Revenue Services Lesotho (RSL).
The Bill also seeks to equip the tax authority with powers to go beyond just collecting tax revenue to also collecting non-tax revenue as government moves to consolidate its revenue sources.
Established through the LRA Act, 2001, the LRA is responsible for collecting tax revenue on behalf of the government.
Non-tax revenue is government revenue that is not generated from taxes such as service fees.
The bill must now be passed by the upper house of parliament, the Senate, and get royal assent to become an act of parliament.
According to Finance minister, Thabo Sophonea, who tabled the bill in parliament, the move seeks to emphasise the taxman’s shift from its previous heavy-handed approach to enforce tax compliance to an approach which focuses on dialogue with taxpayers.
The bill is among several key legal frameworks that Mr Sophonea, in his February 2022 budget speech, said must be passed before the dissolution of the current parliament for the 2022/23 national budget to be successful.
He said the bill also seeks to strengthen the tax body’s administration through restructuring its management structures.
“The bill proposes a name change from Lesotho Revenue Authority to Revenue Services Lesotho,” Mr Sophonea said.
“The bill also proposes changes in the auditing of LRA’s accounts to be done by the Auditor General instead of being done by independent auditors as is currently the case. The bill also seeks to amend the tax body’s functions to accommodate collection of non-tax revenue,” he said.
Before it was approved by the National Assembly, the Bill was seconded by Justice and Law minister, Advocate Lekhetho Rakuoane, who said giving the tax authority a new identity and functions could enhance revenue collection.
“I support the adoption of the Bill and hope that by moving away from an enforcement approach to a dialogue-oriented approach, the taxman will be able to collect more revenue to improve the public funds which have been depleted by the Covid-19 pandemic,” Adv Rakuoane said.
Also supporting the bill, Forestry, Range and Soil Conservation Minister, Motlohi Maliehe, said it was high time that the LRA was given powers to collect non-tax revenue as the government was struggling to raise adequate resources for its financial obligations. This because of the failure of many of its departments to satisfactorily collect non-tax revenue.
“With many government departments constantly failing to hit their non-tax revenue collect targets, it is fitting for the tax body to be equipped with powers to collect non-tax revenue as it has demonstrated its excellence in revenue collection,” Mr Maliehe said.
The issue of LRA collecting non-tax revenue was first broached by then Finance Minister, Moeketsi Majoro, in his 2019/2020 budget speech.
“During the 2019/20 financial year government will instruct the LRA to collect non-tax revenue,” Dr Majoro said at the time.
Efforts to get a comment from the LRA this weekend were fruitless this weekend as public relations, Pheello Mphana’s phone was unavailable.