RSL drives clarity on cross-border tax rules

Empowers businesses with training on international tax pacts

RETHABILE MOHONO

MASERU – In a significant move to boost tax compliance and facilitate international trade, Revenue Services Lesotho (RSL) hosted a dedicated training workshop for businesses and clients at Victory Hall in Maseru last week.

The session focused on the critical function of withholding agents in applying Lesotho’s Double Taxation Agreements (DTAs) and ensuring full compliance with the Income Tax Act of 1993.

Lesotho currently has DTAs with key international partners, including eSwatini, Botswana, Mauritius, South Africa and the United Kingdom. These agreements are vital tools designed to prevent double taxation, curb tax evasion, and offer significant benefits such as reduced tax rates for residents of the treaty nations.
RSL officials leading the training emphasized that each DTA contains unique provisions. The workshop provided attendees with detailed guidance on the specific tax treatments and advantages available under each agreement.

A core focus was the legal obligation of Lesotho-based payers, or withholding agents, who are responsible for deducting and remitting the correct amount of tax on payments made to non-residents.
Key objectives of the DTAs covered included eliminating juridical double taxation, creating certainty for investors and traders, granting reduced withholding tax rates on certain types of income, lowering compliance costs for cross-border business and preventing tax discrimination and providing mechanisms for dispute resolution.

Participants received clear instructions on compliance procedures, which require agents to withhold the correct tax, remit it promptly to RSL, and issue certificates to non-residents while submitting copies to the revenue authority.

This initiative is part of RSL’s broader strategy to foster a culture of voluntary compliance. By equipping businesses with practical knowledge, the RSL aims to streamline international transactions, enhance transparency, and safeguard Lesotho’s tax base, all while encouraging a favourable environment for foreign investment.