LRA shoots down clearing agents’ claims

LRA shoots down clearing agents’ claims

MASERU – THE Lesotho Revenue Authority (LRA) boss has rejected clearing agents’ claims that the authority is imposing unreasonable tax on imported cars. Thabo Khasipe told a press conference yesterday that the LRA has not imposed any new duty or tax on imported vehicles.
Most of the imports are second-hand cars from Japan.

Khasipe said when the LRA commissioner of customs realised that there wereas a lot of inconsistencies in terms of valuations he introduced a post-clearance audit. “This was to ensure that there was no revenue that falls through the cracks and if that happens, it is adjusted accordingly,” Khasipe said.

He said the idea is for post-clearance auditors and risk assessment personnel to carry out a thorough valuation of imported goods to ensure that the value of declared goods is correct. This, he said, applies on all imported goods across all sectors and it can be done a week or four months later after the product has been imported.

Khasipe said there is not enough time at the borders to verify everything submitted or declared.
The LRA’s boss comments come amid complaints from clearing agents that they were receiving a raw deal from the tax authority.
The managing director of Flying King, a clearing agency in Maseru, Mohale Joel, told thepost that the LRA’s new measures were having a negative impact on their business.

He said they had been using the transactional value method at the border gates for the cars that they are importing from outside the country.
“We have been using this method to buy cars from Japan over the years,” Joel said.
But all of a sudden the LRA changed the method and they never communicated with us, he said.

He said the LRA only told them that they would use their own method to assess the value of cars imported into Lesotho.
However, Khasipe said the LRA had decided to switch to the post-clearance audit as their preliminary investigations had revealed a bigger problem.
“We are operating on the premise that people are willing to fulfil their legal obligation and civic duty hence, they cannot intentionally evade tax,” Khasipe said.

He said their assessments had revealed that there was under-declaration of vehicles and they understand that it might not have been intentional due to lack of understanding or knowledge.

Khasipe said in some cases they found that a 2008 Honda Fit was declared at the value of M17 000 while another vehicle of the same model was declared at M9 000. “We understand that two similar cars can never be of the same price because the other might have, for example, leather seats, a bigger engine or was well kept,” he said.

However, Khasipe said they believe that two vehicles of the same model should be in the same bracket cost-wise.
He said people should distinguish between the value and the price of a product.
“We do not charge tax on the price but we charge tax on the value of the item,” he said.

He said whether one might have bought the car at a low price, had a discount or had a car as a present, they charge tax on the value of that car not the price. Clearing agents said they had held a series of meetings with the LRA to resolve the matter. They said they had at one stage invited the Ministry of Trade to one of the meetings.

Joel said at one of the meetings they were told by the LRA that they were not car dealers but clearing agents.
He said the LRA had informed them that there was an outcry from local car dealers that they were taking their business.
Joel said it takes the LRA a month to clear just one vehicle at the borders, a situation that had resulted in slow delivery of vehicles to their clients.
He said they are likely to lose business as a result of this.

He said they are getting different stories from LRA staff deployed at the borders over the new method of valuating cars.
What is appalling though is that “we bring all the documents to the LRA as proof of payment and all the monetary issues incurred but it seems like we are unable to reach a common ground with the LRA”.

Khasipe said the only regret is that they have failed to pre-announce themselves when they embarked on this post-clearance audit.
He however assured clearing agents that the LRA will communicate with the relevant stakeholders in future.
Khasipe said the LRA wants to be a facilitating and a taxpayer-friendly institution rather than a ‘court’.

Majara Molupe & Lemohang Rakotsoane

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