MASERU — The Lesotho Revenue Authority surpassed the government’s set targets for tax collection for the just ended financial year.
The LRA exceeded the targets for both Income Tax (tax from workers) and Value Added Tax (tax on goods and services) by 26 percent.
The government had set a target of M2.012 million but LRA collected M2. 530 million representing a surplus of M518.5 million.
Income tax was the highest contributor with M1.542 million.
This was M491.8 million above the annual target.
The LRA said this was the highest surplus ever recorded since the authority was established.
Last year the authority exceeded the target by 12 percent.
The acting commissioner general Thabo Letjama said the targets had been surpassed despite economic challenges.
“The economy suffered a setback as the real GDP growth rate has been revised downwards from five percent to 3.1 percent for the year 2008/09. Despite multiple shocks to the world economy, the tax revenue generated persevered,” Letjama.
“This is exceptional performance is mainly attributed to strong collection of income tax amounting to M1,542.8 million, which is above the annual target by M491.8 million (47 percent).” he said.
He said VAT collection amounted to M9877.7 million, which is above the annual target by M27.1 million.
Since VAT is a consumption tax, it responds immediately to shocks in the economy.
“Given VAT collections background laid out above, it was expected that VAT collections would decline, but on the contrary, LRA registered a surplus,” he said.
Income tax collection has been above its target in all the 12 months of the financial year despite the shocks that were experienced during the year.
Last year, the LRA had exceeded its target for collection of both income tax and VAT by M222 million, or 12 percent. This year’s performance is up by M518.5 million, a whopping 26 percent.
The main contributor then was still income tax which exceeded its target of M1, 042.54 million by M178.83 million (17.15 percent).
This year’s performance, comparatively, is higher by approximately 30 percentage points.
VAT performance was also very solid, with total collection of M847.87 million exceeding the target of M804.45 million by M43.42 million (5.40 percent).
This year’s performance is higher than last year’s by two percentage points.