By Tkay Nthebe
“Paying tax should be framed as a glorious civic duty worthy of gratitude – not a punishment for making money” Alain de Botton
“TKay, why should I go through all the trouble of submitting my tax returns?”
If there is one question that I get a lot from professionals and entrepreneurs during this time of the year, it has to be this one. My focus for this article is to answer this question, specifically for people who are employed. As a point of departure, let’s start by understanding what tax is.
Well, tax is one of the sources of income for government, collected by the Lesotho Revenue Authority (LRA) in our case. This money is spent on building roads, hospitals, improving schools and taking care of those who cannot afford to take care of themselves. As Basotho, we therefore have a responsibility and obligation to pay Personal Income Tax (PIT) and to declare our income every year between 1 April and 30 June – what is popularly called the “The Tax Season”.
Take Nts’eliseng for example, an employee who earns a monthly income with five years working experience. Though her employer has a responsibility to deduct tax from her monthly earnings and pay them over to LRA, Nts’eliseng is not registered as a taxpayer and has never filled her annual returns since she started working. The question that probably comes to mind is “if she is already paying taxes monthly, why must she file her tax returns? Surely the LRA already knows her taxes are paid through her employer”
Well, if you’ve never physically filled in a tax registration form and do not have a Tax Identification Number (TIN), then you are not registered with LRA. This is problematic because regardless of how consistently your employer has paid over your taxes to LRA, if you do not submit your tax returns; you won’t be compliant. Furthermore, we need to change and correct the misconception that the employer is filing tax returns on behalf of its employees, this is unfortunately not true.
“So as an employee how can you ensure that you are compliant then?” The following process can be followed to ensure compliance.
- Step 1: Register with LRA by downloading the taxpayer registration form online and submit.
- Step 2: Complete the annual tax assessment and file your return. You’d need to request a P16 form from you HR Office, download the Tax Assessment form from the LRA website, complete it and submit it along with the P16 form to the LRA.
- Step 3: Apply for a tax clearance and obtain a tax clearance certificate.
- Step 4: Request a Ledger from LRA to ensure that your filing and payments are reflected in the LRA System
I know that the process described above may seem long and tedious, leading to some people not filing, but the fact that all this can be done online, the process is really worthy. The danger of not filling can have negative implications, which I will discuss in the next article. As we draw closer to the 30 June 2021 submission deadline, my plea is to take action, ensure you are registered and a responsible citizen who files their returns. Taking care of our tax affairs is an important part of our financial planning.
Disclaimer: The views and opinions expressed in this article are those of the author.
