MASERU — The Lesotho Revenue Authority (LRA) says it is worried about dubious auditors who cook taxpayers’ books to help them evade tax.
The Taxpayer Services Commissioner, Maleshoane Morakabi, told a press conference on Friday that it had come to their attention that fly-by-night auditors, who seem not to have offices, wait outside the LRA tax offices and help tax payers to evade tax.
Morakabi said the LRA has had several cases where businesses brought questionable financial statements after being in contact with auditors who work from cars parked near tax offices in Maseru and in other districts.
She said some of these auditors cannot be traced because they only make signatures on financial statements and they do not show their full names and addresses.
Many businesses have their books audited within two to three hours outside the LRA offices, especially during the tax filing deadline season, Morakabi said. The deadline for filing tax returns is June 30 every year.
“Many taxpayers who have been helped by these auditors deliberately file inaccurate return forms and this is very worrying,” Morakabi said.
“Sometimes their return forms show that they do not make profit at all but when our officers go to their businesses to investigate if they were not making profit they find that the companies had misled the LRA.”
Financial statements should be accurate to the last detail, she added.
Taxpayers are required to introduce their auditors to the LRA officials so that they know who they are.
Taxpayers are required to hire auditors registered with the Lesotho Institute of Accountants (LIA) who can be held accountable for professional misconduct.
Tšepo Raletooane, who is the Assistant Taxpayer Commissioner, added that it is a criminal offence for a person to masquerade as an auditor and give services to the public. Raletooane however said sometimes it is difficult to establish whether a taxpayer had received services from a questionable accountant or kept their own books.
“It is not a criminal offence for a person to keep books of his own business or to ask a family member to do that,” Raletooane said. “So, it is not easy to establish whether a taxpayer hired dubious auditors or not,” he said.
Bogus auditors reportedly target small and medium enterprises because the law does not explicitly force them to chatter accountants registered with LIA.
“The law requiring the use of LIA registered auditors or accountants applies only to companies and many times sole proprietary businesses pick anybody with a little accounting knowledge,” Raletooane said. Misleading LRA officials is a criminal offence, he added.
The LRA Head of Litigation, Realeboha Mathaba, told journalists during a workshop on taxation and financial reporting on Thursday that the taxman has powers to arrest and prosecute a person for giving inaccurate information on their financial status.
“Being uncooperative to customs officers or LRA officers can lead to arrest and prosecution,” Mathaba said.
“We should always be honest when we file our tax returns or quizzed by customs officers because we might be in trouble once it is discovered that we are untruthful,” he said.
Meanwhile, Morakabi has called on taxpayers to start filing their tax returns to avoid mad dash when June 30 approaches.