LRA to build own offices to arrest costs
THE Lesotho Revenue Authority says it intends to construct its own office premises to arrest its runaway revenue collection costs which stand at six percent compared to the one percent average in the region.
This was said by LRA’s delivery unit manager Lineo Matsepo Selialia in a recent interview with the Lesotho Times. She said arresting the organisation’s high expenses would bring financial stability within the organisation and enable it to improve its overall revenue collection performance.
She said revenue collection cost reduction is one of the expected outcomes of the organisations new strategic plan running from 2018 to 2023.
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 seven percent shortfall.
Ms Selialia indicated that the costs that LRA spends on collecting revenue too high compared to the international standards and are also the highest in the southern African region.
In comparison, Botswana spends an average below one cent to collect one pula; South Africa spends an average of one cent to collect one rand; with eSwatini spending an average of five cents to collect one elangeni.
“It is very expensive to collect revenue in Lesotho,” Ms Selialia said.
“In fact, you could say we have been doing well in collecting revenue under these difficult circumstances.”
With the international benchmark at spending one cent to collect one loti, Lesotho’s ratio is six times more at six cents to collect one loti.
She said this may be attributed to a number of factors such as the fact that LRA rents office spaces scattered around the Maseru, which increases its operating costs.
“Having our own premises where all our services will be available under one roof will make it easy to operate and also help us to bring our costs down.”
Currently, the LRA has rented office space at the Finance House, Oblate House, MGC Park and Maseru Mall among others.
Although currently at preliminary stage, she said plans are underway towards construction of the house.
“Another reason why we have been having high costs is due to our focus on enforcement, which can be quite costly.”
She said the organisation incurred high legal costs of dragging non-compliant clients to the courts. She said adopting a friendlier approach and inculcating a service-oriented culture as reflected in their new strategic plan would also help to reduce their high operating costs.
The organisation has also lined-up developing financial management principles and implementing voluntary compliance measures to reign in its high operating expenses.
Meanwhile, in a bid to improve its service delivery, the LRA has launched a call centre, which will initially be accessible between 7am and 5pm week days. The platform is meant to be used for all tax enquiries or customs related issues.
“LRA has launched a new call centre as part of its new strategic objective of enhancing service delivery and expanding the service channels. The purpose of the call center is to establish a central place where all the clients’ enquiries and queries would be directed and solved without coming to LRA offices,” a statement from the organisation said this week.
“The new call centre that was launched on September 2018 will be operational in business line of taxes on Mondays to Fridays from 8am to 5pm. The call centre is expected to significantly reduce the number of people coming to the points of contact just for enquiries.”
The benefits of the centre to clients include quick response on enquiries and queries; easy feedback on enquiries and queries; advisory services without having to visit LRA offices; guidance on required documents at the points of contact; first-hand information from trained call centre agents; and one channel of communication on all tax and customs related questions.
“The Call Centre which will be the central point of contact for all enquiries seeks to encourage compliance and make it easy for LRA clients to comply as there will be more service channels at their disposal,” the LRA said in a statement.