Spotlight on voluntary tax compliance

NEO SENOKO

MASERU – Paying tax is regarded as one of the most patriotic activities one can engage in.

In Lesotho, however, there are people who go to extremes in order to minimise the taxes they pay while others completely evade taxes.

Individuals and businesses go as far as hiding the money in offshore accounts or hiring expensive accountants just to wring every penny possible out of the system.

While others intentionally avoid paying taxes, there are some who are completely oblivious with regard to why they should be paying taxes.

For many people the big question has always been about where the money goes.

Those who intentionally evade paying taxes frequently blame politicians for chowing their hard-earned monies, instead of improving the country’s infrastructure which remains in shambles.

Government gets most of its spending money through tax revenue. The money should be used, among other things, towards improving infrastructure, improving health care systems, as well as for the country to pay off its debts.

In Lesotho though, poor quality infrastructure services have for a long time been considered a serious problem. In particular, absence of good roads prevents access to the mountain areas with tourism potential.

Lack of infrastructure also means rural populations cannot easily access markets, schools and health facilities.

In a continued move to educate people about the importance of paying taxes, a local company, TKO Consultancy, in partnership with the Lesotho Revenue Authority (LRA), staged a personal tax masterclass in Maseru on Saturday last week to spread the message of tax compliance.

TKO consultancy specializes in combining financial literacy with public speaking to provide training workshops that are in line with educating and inspiring young professionals to particularly change their behaviour and take control of their personal finances.

“This is the time of the year when people are expected to file tax returns, so with this event we are trying to further educate people and make them appreciate the importance of paying taxes.

“This is because we realised that many people do not understand why they have to pay tax. Others have a problem with how the money is used so we took it upon ourselves to further convince them as to why they have to pay,” said Tokiso Nthebe from TKO consultancy in an interview with Public Eye on Saturday.

Nthebe revealed that judging from the people who attended the event, it was evident that a lot of work needs to be done in terms of education. This he said is because many people seemed frustrated about tax issues and how to go about it.

The event was facilitated by Likeleli Monyamane who is the founder of Inspire Innovation.

For the 2018/19 financial year, the Lesotho Revenue Authority (LRA) met its revenue target for the first time in two years. The tax authority collected and remitted to the government M6, 984 billion which was M114 million more than the set target of M6, 869 billion.

The authority has consistently failed to meet its target in recent years, remitting M5, 989 billion in the 2017/18 financial year. In this current year LRA failed to reach to the set target of M600 million.

For the 2018/19 financial year the LRA Commissioner General Thabo Khasipe attributed the success to the promotion of a voluntary tax compliance culture by the authority.

“Generally, we did very well when it comes to the VAT collection but I am specifically happy that most of our collections in this area come from the collections within the country. This is thanks to our new strategy; it is a sign that people now understand their role in this whole situation.

“Promotion of the voluntary compliance culture also helped us a lot because at first we had people who did not want to comply at all but now things are different since the new strategy,” Khasipe said in an interview with Public Eye shortly after announcing the revenue collection for the past financial year.