More small firms paying their dues

More small firms paying their dues

MASERU – THE Lesotho Revenue Authority (LRA) says tax compliance among Small, Micro and Medium Enterprises (SMMEs) has improved compared to previous years.
This is after the LRA introduced Tax Lottery and Standardised Business Tax last year, which are seen as the major factors for businesses in this category to pay.
Tax Lottery was introduced last year to motivate SMMEs to comply, file and pay taxes before May 31.
Under the programme, taxpayers are put in a draw and the winner walks away with a vehicle.
Last year, an entrepreneur from Quthing walked away with a Toyota 4X4 Hilux.

The authority is this year giving away five vans to five entrepreneurs who will emerge as winners at the end of the lottery.
It is because of the desire to win vehicles that many SMMEs filed and paid their taxes before May 31,
Last year over 6 000 SMMEs entered the competition.

Letsatsi Sepiriti, Head of Client Education, said in the past SMMEs used to declare nil even when they had made profits due to lack of businesses management skills.
“The tax compliance improvement is credited to the introduction of the Standardized Business Tax programme as well as the Tax Lottery,” Sepiriti said.
The LRA introduced Standardised Business Tax last year as part of its quest to improve compliance and assist SMMEs comply with their tax obligations.
The programme, which started with the retail and transport industry, saw  a 4+1 sedan taxi liable for M720 tax while a bus invited M3 000 tax per year.
“This year’s compliance is 200 percent compared to last year’s numbers showing that there is progress,” Sepiriti said.

Pheello Mphana, the LRA’s Head of Stakeholder Engagement, Marketing and Public Relations, added that the Tax Lottery has assisted in improving SMMEs financial record keeping.
Six thousand SMMEs are said to have shown interest in this year’s tax lottery.
Mphana said 6 026 SMMEs entered the draw, from which 629 were selected before the number was whittled down to 25.
He said as a result of improved compliance, the cost of revenue collection has also gone down from 6 cents per Loti to 5 cents.
“We are hopeful that the cost will keep going down,” Mphana said.

Staff Reporter

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