THE Lesotho Revenue Authority (LRA) has advised importers to use commercial borders to avoid being charged value added tax (VAT) despite having already paid it when they bought goods in South Africa.
This because the South African Revenue Services (SARS) has stopped refund VAT invoices at non-commercial borders.
LRA deputy commissioner client services, Tebello Makhechane, this week said the new system would be introduced from 13 December 2021 after SARS said it would no longer accept VAT invoices from non-commercial borders where it has no officials to avoid revenue losses.
In the past, upon a trader’s entrance into Lesotho, the LRA required them to produce a VAT invoice for their goods. The LRA would then submit the invoice to SARS to claim refund for the VAT paid in South Africa.
VAT is a consumption tax that is levied on a product repeatedly at every point of sale at which value has been added. It is commonly expressed as a percentage of the total cost. in Lesotho, it is currently at 15 percent of the goods’ value.
“The LRA will no longer accept tax invoices in order to claim VAT refunds from SARS, as SARS no longer refunds VAT invoices if they are from non-commercial borders,” Mr Makhechane said.
He said they will now accept cash payment for VAT from importers at the non-commercial ports of entry.
“So, as a result of the SARS changes, all traders entering the country through Sani Border, will be required to pay VAT for goods worth M250 and upwards from 13 December 2021 as we will no longer accept the VAT invoice.”
Currently, the Sani Border in Mokhotlong district is the only operational non-commercial border under the existing national Covid-19 controls, and has been affected by the change in VAT payments. The changes will also apply to other non-commercial borders when they eventually re-open. These are Monontša, Peka, Sephapho, Makhaleng, Tele and Ramatšeliso.
“We are therefore advising traders to avoid using the Sani border as a port of entry as they will pay VAT in both South Africa and Lesotho. We encourage traders to use alternative commercial borders since there are no changes at those ports where we will accept tax invoices,” Mr Makhechane said.