LRA legal tax battle rages, ten years later



MASERU – A long drawn legal battle between a British American Tobacco company (SA) representative in Lesotho and the Lesotho Revenue Authority (LRA) has landed in the Appeal Court for the second time.

This time brought by the representative, Thabang Qathatsi, after his appeal in the Commercial Division of the High Court was in 2020 dismissed for lack of grounds of filed record. Qathatsi worked for the South African tobacco company from August 1, 1996 to December 12, 2007.

The dispute between the parties stems from tax deductions effected on Qathatsi’s employment income during the tenure of his employment. His income was subjected to Fringe Benefits Tax (FBT) and Pay as You Earn (PAYE) but he claims that some of the taxes were improperly calculated.

Aware of the miscalculations, Qathatsi says he approached LRA’s Commissioner General who accepted the liability and promised to pay the refund but that when the refund was eventually made, it was insufficient. He says he sought to assist LRA to correct the mistake but was instead was met with objections from the Commissioner General having initially agreed over the matter.

The refund he states was both in relation to PAYE and Fringe benefits taxes. This prompted him to approach the Revenues Tribunal sometime in 2012 and asked it to determine whether the Commissioner General’s assessments for the Fringe Benefit Tax paid and PAYE was correct.

It found in favour of the Commissioner and ruled that “gross income figures claimed by Qathatsi were unverifiable. The tribunal also said the complainant has failed to make a prima facie case and that he is likely to lose in his claim. Subsequently, his contentions were dismissed.

Qathatsi then escalated the matter to the civil division of the High Court in 2013 asking for a review of the tribunal proceedings but the court directed that the matter be referred back to the tribunal to be determined on merits – decide whether Qathatsi is owed or not.

The decision was opposed by the LRA which instead approached the Appeal Court. It’s what the Apex court decided but Qathatsi in 2017 now went to the tribunal yet again raising the same complaints. The tribunal dismissed him, saying the matter has been adjudicated by a competent court and that the tribunal would be Functus officio.

The desperate Qathatsi approached the High Court again, this time the Commercial division of the court seeking the review of the latest proceedings before the tribunal. Justice Sakoane Sakoane as he was then struck the application from the court’s roll requesting a proper record.

The application was re-launched and he dismissed it for lack of grounds of appeal filed of record. Qathatsi is now appealing Judge Sakoane’s decision and the rulings by the tribunal. He says the tribunal misdirected itself in ruling that it will be functus officio in determining his complaint when he approached them for the second time.

He also argues that the commercial court was not properly constituted in terms of laws governing Tax Tribunals when it struck his application from the roll.

He is asking the Appeal Court to find if the Tax Tribunal was correct is finding that he is not owed. According to his calculations, the authority owes him over a hundred thousand and has only paid approximately M94 140.

Qathatsi is also asking the Apex Court to find if striking of his application from the court’s roll was within the rules of the tribunal.

Further whether it was correct for the judge of the tribunal to have considered his second tribunal “res judicata and the tribunal functus officio and whether or not the said principles of res judicata and functus officio are part of the scheduled or related laws governing the revenue appeals tribunal.”

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