District council warned of sloppy accounting

MASERU-THE Auditor General has found that the Leribe District Council repeatedly failed to remit tax it collected from employees or service on the Lesotho Revenue Authority (LRA)’s behalf.

The Income Tax Regulations 1994 says tax withheld or charged must be remitted to the LRA within 15 days from the end of the month in which it is collected.
The auditor general’s report for the year ended 31 March 2019 says the district council routinely held on to the taxes for months.

The report says the district council failed to forward over M1.6 million of Pay-As-You-Earn (PAYE) to the LRA between April and October 2017.
The council, the report says, did not remit the over M27 854 it withheld from Stepandre Spares and Services, the company that repaired its road construction equipment.
PAYE of over M1.5 million from November 2017 to March 2018 was only remitted to the LRA in April 2018.

Tax amounting to M297 587 withheld from different contractors and suppliers from August 2017 to March 2018 was sent to the LRA in April 2018.
“If tax is not remitted on time, there is a risk that it might be irregularly used for other purposes and that will distort the financial position of the LRA on the collection of tax revenue,” the report says.

The audit team could not verify the correctness of PAYE for November 2017 and February to March 2018 due to the absence of the accounting records for those months.
“The payroll was also not available hence the audit could not confirm whether salaries were paid to established positions and existing employees,” she said.

She encouraged the management to make a follow up on the accounting records.

Staff Reporter