Cabinet okays VAT law

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By Kefiloe Kajane

The Cabinet this week approved the Value Added Tax (Amendment) Bill 2021, paving way for the draft law to be tabled in parliament.

The executive directed that the Bill be read immediately when parliament resumes.

The office of the clerk of parliament released a notice on August 25 that the 12th meeting of the first session of the 10th parliament will be on September 10.

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The Bill is meant to allow and make it easy for Lesotho Revenue Authority (LRA) to collect tax especially for imported goods.

In an interview with theReporter this week, LRA’s public relations manager Pheello Mphana said when approved, the law will help the authority in improving taxation of imported services and how to tax digital economy.

He said there were no specific laws dealing with that directly. He said there are many digital services that are being provided but that there is no legislation guiding the tax collection.

“Although we cannot go in to much details now about it, but the bill is going to help us a lot on how those digital services can be taxed. There were many gaps where you will find that there is economic activity that is happening that has no laws guiding them,” he explained. 

The Bill is an amendment of the 2001 Value Added Tax Act.

This is after in August, hundreds of African finance and tax officials convened for a tax policy dialogue hosted by the African Tax Administration Forum (ATAF) at which they discussed ways to boost government taxing rights.

According to Forbes Africa the international level, it looks like a unified African approach to global taxing rights before the OECD (Organisation for Economic Co-operation and Development) and other global bodies.

South African deputy minister of Finance David Masondo, who had taken a lead on the discussion, said that African governments, guided by the African Union and ATAF, should rally together and devise an African position on taxing the digital economy.

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