THE government has set the Lesotho Revenue Authority (LRA)’s 2022/23 revenue collection target at M8, 6 billion, about M2 billion more than the previous 2021/22 target.
The move is meant to help the government meet its increased funding needs, especially after the devastating effects of the Covid-19 pandemic. But the new target appears to be a tall order as the economy remains comatose, with no substantial inward investment and with decimated businesses unlikely to recover to their pre-Covid levels anytime soon.
The LRA collected M7, 2 billion against a M6, 6 billion revenue collection target during the 2021/22 financial year and with the economic slowdown notwithstanding.
Finance minister, Thabo Sophonea, told a media briefing in Maseru this week that the new target could only be achieved through the enactment of some new tax laws that are currently before parliament.
“The LRA has been directed to collect M8, 6 billion in the 2022/23 financial year,” Mr Sophonea said.
“I pleaded with parliament to prioritise legal frameworks that will enable the LRA to discharge its mandate effectively. These legal instruments that I am referring to include the Tobacco and Alcoholic Products Levy Bill, the Income Tax (Amendment) Bill and the Tax Administration Bill.”
The Tobacco and Alcohol Products Bill will for instance hike levies on these products to boost revenues.
He expressed gratitude to parliament for passing bills like the LRA Act (Amendment) Bill and the Value Added Tax (Amendment) Bill before its dissolution in July 2022. He urged legislators to approve the other outstanding bills.
“These are positive developments, and I strongly believe that the enactment of these legal instruments and others that are still in the pipeline will improve tax collections and will also pave way for LRA to venture into collection of non-tax revenue.
“I am expecting the LRA to develop a model and a clear road map towards collection of nontax revenue. We need to ensure that the government collects all revenues owed to it.”
On his part, the LRA board chairperson, Robert Likhang, expressed confidence that the Authority would achieve the revenue collection target. This will be aided by its moves to harness modern technologies to revenue collection.
“LRA aspires to collect M8, 6 billion during 2022/23 as directed by the ministry. This target is premised on among other things, the phenomenal impact that digital technology is having on businesses around the world, which is creating exciting and viable new opportunities for business and hence revenue growth.
“However, capitalising on this opportunity requires a strong focus on innovation and collaboration. At the same time, there has never been a greater imperative to embrace technology to counter the downward pressures on the macro-economy in order to maximise efficiencies and reconfigure our solutions,” Mr Likhang said.
In the next few years, he said, the LRA would adopt modern technologies to support revenue mobilisation strategies. He said the Authority was focusing on the acquisition, utilisation and maintenance of contemporary technologies including systems automation, adoption of blockchain-based technology, artificial intelligence (AI), machine learning and data mining.