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Let us create an enabling business environment

by Lesotho Times
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THE Lesotho Revenue Authority (LRA) and indeed all other government and quasi-government entities must always bear in mind the importance of always ensuring the environment is conducive to business operations.

Year in, year out we yearn for more business and if reports from the British parliament are to be believed our beloved Mountain Kingdom only receives an average of US$51 million in foreign direct investment per year and a third of that coming from our former colonial power.

Now US$51 million is small change considering that there have been stories of corruption in neighbouring South Africa and Zimbabwe where individuals stand accused of embezzling larger amounts.

We need to do much more to attract investors and this will not be achieved by numerous overseas trips and well-written and articulate speeches.

It can only be achieved by concrete plans and actions to create an enabling environment in which the ease of doing business is guaranteed.

Our appeals for investment to stimulate economic growth will continue to fall on deaf ears if the country continue to generate negative reports about practices by government and quasi-government institutions which have negative repercussions on the conduct of business.

Elsewhere in this edition, we report that car importers and clearing agencies are at loggerheads with the Lesotho Revenue Authority (LRA) over the latter’s decision to introduce a new clearing system at the country’s ports of entry which has not only resulted in an increase in tariffs but also delays in clearing imported vehicles.

“The changes were not communicated to us beforehand so we do not know what the basis for higher taxes,” one of the car dealers told this publication.

“Sometimes the extra charges are huge amounts and this has negatively affected our business in that we can no longer give people the exact quotes which let them know exactly how much it will cost them to import cars from Japan.”

It is also said that LRA officials have rather strange method of assessing vehicles to determine how much import duty must be paid. They do not even ask for receipts or invoices but simply look at the cars and just come up with some figure to be paid as tax.

Furthermore, it would appear all these changes were just implemented from the beginning of December without prior communication.

Now everybody understands, as we also do, that the LRA must collect taxes to enable government to implement its development functions. We understand that taxes must always be paid as and when they are due.

What we cannot understand however, is the fact that such important changes that obviously affect the manner in which business is conducted are not planned and communicated to affect ted parties.

We always speak about the importance of instituting measures that promote the ease of doing business because any country that does not prioritise that will be shunned by investors.

Now how would it look to the outside world when they read of vital institutions like the LRA making and enforcing decisions that breed uncertainty when it goes without saying that certainty in the business environment is the sine qua non?

Rather than create an environment which breeds uncertainty and complicates business transactions we should all be working to eliminate all obstacles which would only serve to turn us into an unenviable destination for potential investors.

We hope that the LRA and the affected businesses will find an amicable resolution to this issue which is also affecting clients.

And this is not about the LRA only every institution in the country that is connected with business.


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