‘Import tax rebates underutilised’

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Bereng Mpaki

LOCAL businesses have been urged to make use of import tax rebates to reduce operational costs and stimulate economic growth.

According to the Ministry of Trade and Industry’s Tariff Investigation Manager, Kekeletso Tsumane, most businesses in Lesotho did not apply for import tax rebates with the exception large textile garments manufacturers.

She said the import tax rebates were effected to stimulate economic growth and competitiveness, adding they were available for most goods imported for business purposes. Import duty is tax payable on imported goods, and among other purposes, is meant to protect the importing country’s industry if it is producing similar goods.

Ms Tsumane said by not making use of the rebates, many local businesses importing raw materials from outside of the South African Customs Union (SACU) region were incurring higher production costs than necessary. SACU is the world’s oldest customs union and consists of Botswana, Lesotho, Namibia, South Africa, and Swaziland.

“A rebate is a tax incentive given by the government to importers for goods that are meant for production. Although rebates can be imposed for many reasons, they are fundamentally intended to encourage trade in the country and enhance its competitiveness through reduction of operational costs,” said Ms Tsumane in an interview with the Lesotho Times this week

“By reducing operational costs, importers are able to increase their production base and hire more people in the process.”

She said her office was concerned with the slow uptake of importers in applying for rebates although the incentive applied to almost any goods imported from outside of SACU for business purposes.

“We have noted with concern that most of our importing producers don’t make use of the rebates which would help to reduce their operational costs,” Ms Tsumane said.

“Rebates can apply to most goods imported from outside of SACU, although many such goods are not listed in the Tariff Book.”

She said her department would soon embark on public awareness campaigns about rebates.

“In the past, we have been disseminating information on rebates through the media. However, we want to intensify these efforts to ensure more people come forward to apply for rebates,” added Ms Tsumane.

Lesotho Chamber of Commerce and Industry Secretary-General Fako Hakane echoed the sentiment, saying few of their members knew about rebates.

“It would not be correct to say all our members are aware of the rebates on import duties. Very few know about rebates. For instance, a company that sponsors sport has a rebate that most of our entrepreneurs don’t know about,” said Mr Hakane.

“So, I believe education on rebates should be an ongoing thing rather than just being a once-off exercise.”

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