Govt debt to LRA, Pensions Fund tops M124 million


Ntsebeng Motsoeli

THE government owes the Lesotho Revenue Authority (LRA) and the Pensions Fund a combined total of M124 million in unremitted tax and pensions contributions, parliament has heard.

This was revealed by the ruling All Basotho Convention (ABC) legislator, Sam Rapapa, who chairs the parliamentary portfolio on Economic and Development.

Mr Rapapa recently made the revelations while tabling the portfolio committee’s report for adoption in the national assembly. He said the government’s debt to the two institutions which is broken as M71 million owed to the Pensions Fund and M53 million owed to the LRA dates back to September 2017.

Mr Rapapa said that the money due to the Pensions Fund was for unremitted contributions by government employees while the debt to the LRA was for outstanding Fringe Benefit Tax (FBT) remittances.

The LRA defines a fringe benefit as “any monetary or non-monetary benefit

derived from employment that does not form part of an employee’s normal salary or wage”. The LRA further states that fringe benefits are taxable.

“It was observed that government has outstanding bills on FBT due to the LRA as required by the Income Tax Act,” Mr Rapapa said.

“The estimated amount due to the LRA is M53, 8 million after a payment of M23 million was made. This liability has not been considered in the Supplementary Appropriation Bill of 2018.

“There is also an amount of M71 million owed to the Pension Fund which dates back from September 2017 and April 2018 when monthly contributions of government officers due to the Pension fund were not paid. This amount is not included in the 2017/2018 Supplementary Appropriation Bill.”

Mr Rapapa said both liabilities have not been considered in the Supplementary Appropriation Bill of 2018 which was only submitted to parliament two weeks ago.

By submitting the bill, Finance Minister Moeketsi Majoro reportedly broke the unenviable trend of his predecessors who had failed to do so for the past eight years.

Mr Rapapa said in lieu of the submission and approval of the bill, previous finance ministers simply proceeded to allocate supplementary budgets without parliament’s approval.

When contacted for a comment, the LRA information officer, Thabang Loko, said he could not discuss the tax issues of their clients.

“The government is our client just like every other client. Therefore, we cannot discuss issues relating to their tax payments,” Mr Loko said.

The M53 million owed to the LRA would come in handy for the institution which has struggled to meet its target over the last two years. The tax authority failed to meet its revenue target of M6, 597 billion in 2017/18 financial year and instead collected M5, 989 billion. This translated to a shortfall of M607.38 million or 9, 2 percent.

In the 2016/17 financial year, the LRA remitted M5, 9 billion to the government, failing to meet the set target of M6, 4 billion. This translated to a 7 percent shortfall.

However, the LRA is confident that it will meet its target this time around. Three months ago, the LRA revealed that it had surpassed its first quarter revenue collection target of M1 696 000 when it collected M1 701 390 000.

The authority said this puts it in a good position to meet its annual target in the current financial year after two consecutive misses.

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