‘Arbitrary rules cause headaches for businesses’
They should have clearly explained to us how we would deal with the matter,” said the dealer who requested anonymity.
Another trader added: “the system at the border is already a mess so this means more congestion as it will make the queues even longer.”
Last week, car importers and clearing agencies told this publication that the LRA had introduced a new clearing system at ports of entry which they said had not only increased tariffs but was also taking longer to process.
Some of the car dealers said they were now paying 60 percent more in import duties as a result of the new LRA regulations.
Three clearing agencies who import pre-owned cars from Japan told the Leso
tho Times in separate interviews that the new clearing system, which they say was introduced without prior consultations by the LRA in December 2017, had also bred mistrust as clients blamed them for the resultant delays in receiving their imported vehicles.
According to Mokhali Mofubetsoana, a Phoka Clearing and Forwarding Agency representative, the clearing of cars which used to be done before the vehicles reached the border was now being done only when they had arrived at the border and they were being charged higher taxes.
“We normally do pre-clearance but early in December they (LRA) introduced what they call top-up where they evaluate the imported cars again when they arrive at the border and then add an extra charge,” Mr Mofubetsoana said.
“The changes were not communicated to us beforehand so we do not know the basis for the higher taxes. The extra charges have negatively affected our business in that we can no longer give people the exact quotes which let them know exactly how much it will cost them to import cars from Japan,” he said.
However, the LRA Customs Commissioner, Kali Lepholisa, defended the new regulations, saying they were introduced after the LRA encountered problems with the South African Revenue Services (SARS) in claiming taxes that were paid in South Africa.
“We have a Memorandum of Understanding with SARS to refund us on VAT which was paid to South African supplies for goods exported to Lesotho and we demand those refunds based on the invoices which would be used to clear goods at the border,” she said.
“However, SARS has explained that they have been having problems of goods bought on credit in that they would have refunded us and yet they never get the tax from those suppliers. So to avoid that high risk, VAT will from 1 February 2018, be demanded at the Lesotho borders for goods bought on credit.
“The local traders have the option to ask their suppliers to give them a zero tax rate on the invoices so that they do not get to pay tax twice or they can arrange with LRA to have a deferment account which will allow them to pay tax at a later date after settling their debts with suppliers so that way they have the proof of payment.”
She said the LRA will meet SARS on 8 February this year to further discuss the issues raised by traders.