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‘Give tourism economic incentives not barriers’

by Lesotho Times
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Bereng Mpaki

LOCAL tourism players have lamented the lack of economic incentives which they say are necessary to stimulate investment into the sector.

This came out at the recent Tax Expo where the stakeholders lamented that the lack of incentives is holding back the industry.

In her contribution at the expo, ‘Marethabile Sekhiba of Scenery Guest said the government should demonstrate its seriousness when it says tourism is a priority sector in driving the country’s economic development by introducing economic incentives for the sector.

Tourism, along with manufacturing, agriculture and technology have been identified by the government as the four pillars that will drive economic growth under the second National Strategic Development Plan (NSDP II).

The tax expo provided a platform for tax stakeholders and clients to discuss and make inputs into the tax policy formulation and tax administration to unlock the potential of both tax policy and administration as drivers of economic growth and development.

“To demonstrate that tourism is indeed a priority sector for the government in developing the economy, the sector needs to have deliberate economic incentives,” Ms Sekhiba said.

Ms Sekhiba was referring to similar incentives that have been extended to the manufacturing sector where corporate income tax rate is reduced to 10 percent as opposed to the 25 percent for general sectors.

She further indicated that they were subjected to withholding tax, which she said is a barrier which is compromising their cash flows and business operations.

Ms Sekhiba said the costs force tourism sector players to resort to making bank overdrafts to keep their operations afloat.

“This practice actually goes against the current Income Tax Act of 1993 and is killing the spirit of entrepreneurship in us.”

Meanwhile, other attendants at the tax expo said more needs to be done to ensure accountability in the usage of public funds, which are collected tax revenues.

Moepi Sematlane, who is retired civil servant, said there is virtually no efficiency in the usage of the public funds by the government. He said efficient use of public funds would ease the burden of revenue collection on the Lesotho Revenue Authority (LRA).

“The major problem for this country does not really lie in revenue collection but it is on the usage of collected revenue. I feel that the LRA should follow up on the usage of the revenue it worked hard to collect,” said another participant.

Another participant, from the hospitality sector, went as far as suggesting that the expo, is misdirected by focusing more on taxpayers than the government which consumes the collected tax.

“Let us turn this forum around and focus our attention on discussing accountability and management of public funds,” she said.

Sam Mphaka, who represented the Lesotho Institute of Accountants (LIA) indicated that accountability and management of public funds is weak, with more focus directed towards auditing.

He said public accounts will always have qualified books if the problem of accountability and management is not addressed.

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