Majoro hunts for moolah

Majoro hunts for moolah

MASERU – FINANCE Minister Dr Moeketsi Majoro’s budget speech yesterday had enough sting to send consumers scurrying for cover.
The good thing about it is that even as he admitted that all is not well with the government’s finances he still could pull together enough resources to give civil servants a 4 percent salary increase. That might not receive wild applauses from public servants but at least it is not far from the inflation rate.

Majoro said government coffers are empty and local revenues are unlikely to fill the void. The solution, he said, is to tighten belts and brace for tough austerity measures. So foreign trips will be curtailed and local resources will be used for capacity building. Financial leaks in ministries will be plugged and unnecessary expenditure curbed. The purging of ghost workers from the public payroll will continue.
But even after those measures Majoro still has gaping holes to fill. He has to find the money from somewhere to fill the void caused by a decline in domestic and SACU revenues.

To do that he has turned to the government’s obvious source of money: the people. Here is how he will raise more to fill the purse:
l VAT will be raised to 15 percent to align with that of South Africa to prevent smuggling.
l The LRA will introduce a reverse charge mechanism to tax imported services
l Government is introducing the Voluntary Disclosure Program which is estimated to yield M225 million in additional revenue
l The LRA will also enhance tax administration measures, targeting improved compliance by major tax contributors. This is expected to yield an additional M350 million

l A small business taxation is being introduced to simplify and improve tax compliance
l A mining tax regime will be reviewed to cater for windfall taxation
l Fringe Benefit Taxation will be reviewed to expand its base and compliance

l VAT rates on telecommunications and electricity, which presently stand at 5 percent will gradually align to the unitary rate of 15 percent. The rates will be increased by 4 percent for telecommunications and 3 percent for electricity

l All ministries, departments and agencies should review and set new rates for all non-tax revenues under their control
l Government will, as soon as practicable, introduce the Government Lottery under the Lotteries Act 1975; the legislation will be modernised in tandem with the operation of the Lottery

l Government will study the introduction of levies on alcohol and tobacco and will consider their introduction at a future time
l The government wants companies in which it has shareholding to start coughing up more in dividends.

Staff Reporter

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