Red tape trips tax reforms

Red tape trips tax reforms

MASERU – GOVERNMENT red tape has sabotaged reforms to the crucial tax reforms that could improve revenue collection and help the private sector.
Finance Minister Dr Moeketsi Majoro said his clamours for those reforms have come to naught.

The reforms include amendments to the Income Tax to introduce tax regimes for the mining sector, small businesses and plug revenue leakages through transfer pricing.

Majoro wants to tweak the VAT Act to remove zero-rating and charge tax on electronically provided services. Also stuck is the Tax Administration Bill meant to modernise, streamline and harmonise government procedures.
The proposed law will also provide tax relief to companies that have hit hard times. The minister also bemoaned that the Alcohol and Tobacco levy that was supposed to help the government generate an additional M200 million annually is also moving slowly.

He blamed it all on the “slow pace of our legislative process”.
He called on the cabinet and parliamentary committees to dedicate sessions to debate the proposed laws so they can be passed in the next few weeks.
Majoro said without those reforms “our tax system will remain unable to respond to the demands, opportunities and risks posed by the dynamic interconnected world financial systems and curb transfer pricing, profit shifting and taxation of electronically provided services”.

The minister however said he was happy that some of his proposals in the last budgets have been implemented.
These include the setting up a Public Procurement Tribunal to deal with tender disputes, a review of the government’s charges and levies.
The police is also working on a law to review all “outdated fees and fines”, Majoro said.

The oil levy has been reviewed from 80 lisente to M1.10.
Unlimited telephone expenses have also been canned while ministers are now travelling Business instead of First class.
The government has also replaced state-vehicles for judges and ministers with thrift ones. Majoro’s biggest victory so far has been the elimination of the contentious half a million Maloti interest-free loans for MPs.
He said the MPs will make their own arrangements to get loans and the government will not settle their debts.

For the past five years the government has been forced to settle MPs’ loans when their terms prematurely ended. Some MPs had turned the loans into a cheap ‘revolving fund’, with those re-elected taking fresh loans as soon as the government cleared previous debts.

  • ART at 224 health centre
  • 221 136 on ART
  • Child Grant Programme (CGP) increased from 37 775 to 41 095
  • 124 000 children benefit from CGP

Staff Reporter

 

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