Majoro increases fuel, phone, power prices


Staff Writer

FINANCE minister Moeketsi Majoro has proposed a raft of tax increases to drive domestic revenue generation. Dr Majoro made the proposals in his budget speech presented in parliament yesterday.

Among the increases is 15 cents increase on the oil levy which could lead to an increase in the prices of fuel.

He also proposed a three percent upward variation of value added tax (VAT) on telecommunications and one percent increase on electricity.

Dr Majoro also proposed a five percent increase in salaries and wages to offset projected inflation.


  • 15 lisente (cents) increase on Oil Levy; and
  • Three percent and one percent adjustment on VAT on telecommunications and electricity, respectively,” Dr Majoro said yesterday.

“I propose to this Honourable House that the 2020/21 salaries and wages be adjusted by five percent across board, to offset the projected inflation rate.”

To protect the lower salary grades from the increased tax burden arising from the adjustments, Dr Majoro proposed the tax credit of M800 per month be increased to M840 per month. This will also see the tax bracket being adjusted from M5 090 per month to M5 350 per month on the lower tax bracket.

He also increased the Old Age Pension marginally by M50 from M750 to M850 per month effective from 1 April 2020 to protect “the buying power of our senior citizens”.

Dr Majoro said also said his undertaking to reform the country’s tax policy and administration with the intention to boost the government’s revenue collection capacity but said this has so far been hindered by the slow pace of Lesotho’s legislative process.

“This required the amendment of the following pieces of legislations:

  • Income Tax Act to, among others, introduce the mining taxation regime, small business taxation regime and to address transfer pricing risks;
  • VAT Act to achieve for example, exemption of exports from VAT rather than the current dispensation of zero rating, taxation of electronically provided services and reverse charge mechanism for imported services;
  • Tax Administration Bill intended to modernise, streamline and harmonise
  • our tax procedure, such as regulation of tax Furthermore, this Bill seeks to provide relief of tax in cases of serious hardship;
  • Alcohol and tobacco levy to increase revenue collection which was projected to be around M200 million

“However, none of these have been achieved mainly due to the slow pace of our legislative process which has resulted in failure to enact the necessary laws to enable theachievementoftheabovepolicyintentions.

“Consequently, this budget does not propose any new tax reform initiatives but rather introduces proposals to expedite implementation of the previously announced tax policy reforms. To this end, my focus in this budget is to propose reforms to the legislative process in order to enable synchronisation of the tax policy pronouncements in the budget and the tax law. In particular, I recommend to Parliament, its relevant committees and cabinet to institutionalise sessions dedicated exclusively to debate revenue policy immediately after passing the budget,” Dr Majoro said.

He said his ministry was already collaborating with the Lesotho Revenue Authority (LRA) and the Office of Parliamentary Counsel to achieve the desired outlook.

“To give effect to these proposals. Without the above recommendations, our tax system will remain unable to respond to the demands, opportunities and risks posed by the dynamic interconnected world financial systems and curb transfer pricing, profit shifting and taxation of electronically provided services,” Dr Majoro said.


Leave A Reply

Your email address will not be published.