LRA EXCEEDS REVISED REVENUE TARGET
MASERU – Notwithstanding the challenges presented by the COVID-19 pandemic, the Lesotho Revenue Authority (LRA) has registered a revenue collection of M6.350 billion, realising a 13 percent surplus into the fiscus.
The 13 percent surplus means the revenue authority exceeded the target by M745 million.
The LRA was given the mandate to collect M5.605 revised from the initial target of M7.591 billion, 35 percent reduction due to the pandemic.
The effects of the pandemic which were characterised by several economic disruptions led to the revision.
While several tax relief measures were implemented permitting for delayed first quarter payments, clients continued to meet their obligations.
The effects of delayed payments were observed from mid-quarter 1, resulting in revenue deficit for May and June, followed by a quick rebound in July.
This was driven by a significant PAYE received from the government during that period.
The overall target, while relatively lower than targets set for recent previous, was however exceeded by 13 percent, the largest gain recorded in the past 10 ten years.
Both income tax and VAT exceeded their respective targets by the highest margins over the five-year period. Income tax registered a 14 percent increase while VAT recorded a 12 percent increase.
Income Tax, at M3.274 billion targeted for the year was exceeded by 14percent, remitting M3.743 billion while VAT with a target of M2.331 billion targeted, remitted M2.608 billion.
“Amid the tough economic landscape negatively affecting business operations, the LRA was able to remit M6.351 billion, registering a 13 percent surplus,” the LRA Commissioner General Thabo Khasipe has said.
VAT collections contracted due to COVID-19 restrictions affecting global supply chains, negatively affecting collections.
Monthly domestic VAT collections averaged M200 million in 2020/21, below M230 million average for the 2019/20 financial year.
“Specific to quarter 1, VAT missed target in the first quarter of 2020/21 largely explained by the introduction of lockdown resulting in businesses in essential services remaining in operation, thereby significantly contracting the economy, the impact was mostly experienced in May, missing the set target by 77 percent,” Mr Khasipe added.
The Minister of Finance Thabo Sophonea revealed in his own remarks that the 2020/21 financial year was the most difficult year as economic activities were significantly constrained due to the pandemic.
Despite the challenges, the minister applauded the authority for managing to collect as much revenue as it did.
“This is a tremendous effort by our tax administration. I am aware it was not easy as I was there throughout this period. I am therefore happy that ultimately, LRA was able to meet and exceed their target under the tough economic environment,” Mr Sophonea also said.
The event also marked the beginning of the beginning and launch of a new filing season for 2020/21 financial year that has just ended. April 1 of every year marks the beginning of the period whereby tax payers in Lesotho are required by law to fill income tax return forms and submit them before the deadline which is June 30.