New measures on cross-border tax affairs

RETHABILE MOHONO

MASERU — The Revenue Services Lesotho (RSL) has introduced new measures to improve transparency and compliance in cross-border tax matters. These measures include the implementation of additional requirements and the submission of specific documents related to South African tax invoices on equipment, business stock, and second-hand vehicles entering Lesotho through different border gates. RSL’s recent announcement about RSA tax invoice declarations is a significant move towards modernising the tax system, increasing transparency, and improving Lesotho’s revenue collection.

During a media briefing this week, Dr. Tseko Nyesemane, the acting Commissioner of Client Services said it is, however, important to note that the new requirements do not replace the existing ones. He said regarding commercial goods, a person who files a claim on behalf of the business owner must attach an authorisation letter clearly stating that they are representing and claiming on behalf of the business.

Dr. Nyesemane said business owners should familiarise themselves with the updated requirements, as mentioned, to effectively combat tax fraud in both countries and for those engaged in cross-border trade with South Africa. “The declaration aims to notify the South African Revenue Service about the alteration in tax residency, which will affect the tax basis and assessment of future returns.

“Additionally, the year of ceasing tax residency may lead to a potential deemed capital gains tax disposal, depending on the assets held and their location at that time,” he said. He further said the RSA Tax Invoice Declaration is an essential component of Lesotho’s tax collection system, adding it is designed to ensure that businesses and individuals accurately report and pay their levies on goods and services imported from South Africa.

Speaking at the same event, Deputy Commissioner of Customs for the Northern Region, Tebello Makhechane, explained the updated requirements for declaring RSA tax invoices. He highlighted the importance of these changes in simplifying the declaration process while maintaining high accuracy and transparency.

“The requirements are terms and conditions that a claim should have when it is submitted, noting that the announced changes have been there by agreement between RSL and the South African Revenue Service (SARS), however, not enforced since the risks of tax fraud did not warrant for them to apply, but lately fraud risks are higher,” he said.

Therefore, he urged all Basotho to comply with this requirement to prevent any unnecessary difficulties, emphasising that although the system may have been slower in the past, it is now undergoing significant improvements.

“The Revenue Service Lesotho is committed to making this transition as smooth as possible, and its staff will be available to answer questions and provide guidance throughout the process,” Makhechane said. Regarding individual claims amounting to over M250, he said a person claiming must provide a photocopy of a passport and a copy of entry and departure from South Africa.

Adding to that, it is recommended that clients purchasing imported second-hand cars from SA should urge sellers to assist in transporting them to Lesotho to prevent fraud and further accomplish every tax invoice of staff.

He said car claims should be registered in Lesotho and have certificates so that they can attach a copy of those to the claims.According to the RSL, it is important to have a good understanding of a used car’s history before making a purchase.

Potential buyers should gather as much information as possible about the vehicle they are interested in, focusing on important factors such as properly documenting the sale to avoid future legal and tax complications.