THE Lesotho Revenue Authority (LRA) will next month implement new strategies to streamline its operations and stem its M7 million tax collection deficit for the 2017/18 financial year.
This was revealed yesterday by LRA Board Chairperson Robert Likhang during a press conference in which he officially announced the reinstatement of the tax authority’s Commissioner General Thabo Khapise.
Mr Khasipe, who was appointed to the post in December 2016, was suspended on 6 February 2017 on allegations of misconduct over his alleged failure to submit tax returns.
He subsequently appeared before the Magistrates’ Court in Maseru on 10 February 2017 to face tax evasion charges.
According to the charge sheet, Mr Khasipe faces eight counts of failing to file tax returns to the LRA from the fiscal year 2006/2007 to 2012/13.
However, the new LRA board which was appointed last month by Finance Minister, Moeketsi Majoro, has resolved to reinstate Mr Khasipe because, among other reasons, there was no evidence which justified an internal investigation into his conduct. As such Mr Khasipe had not been subjected to any internal disciplinary processes with any tangible outcomes long after his suspension, a clear violation of his rights.
The board said its decision was also arrived on the basis that he remained innocent until proven guilty in the court case that was brought against him.
Mr Khasipe- a chartered financial analyst- previously worked for the LRA as deputy commissioner-general from 2004 to 2007 before being appointed Lesotho’s ambassador to Kuwait.
Mr Likhang said Mr Khasipe’s absence resulted in discounted among LRA staff and contributed to its failure to meet revenue collection targets.
“There are two factors affecting the LRA’s ability to reach the target that has been set by the government which are low economic activity, which causes low Southern African Customs Union (SACU) revenues and the ineffectiveness of the LRA staff,” he said.
“From July to November this year, the LRA had no government overseeing committee (board) and also lacked the oversight strategies, leaving it ineffective and lacking direction. Hence the reinstatement of Mr Khasipe is meant to address the expected M7 million deficit.”
Mr Likhang said while the shrinkage of SACU revenues was beyond their control, they would employ a new strategy of maximising domestic tax collection.
“By January (2018) we will have a new strategic plan that will help us overcome the current challenge of the deficit.
“But we are also expecting these strategies to help us reach our targets in the long-term. It will be wrong to ignore the past, so we have employed a consultant to help us in terms of restructuring, and so far we have received their first report which highlights some of the loopholes which we are already addressing.”
Mr Likhang also indicated that the strategic plan entailed a collaborative approach that included the LRA and taxpayers in order to maximize tax collection.
“The LRA has been perceived as an enemy of business people because of the enforcement strategy it has been using whereby they would forcefully shut down businesses that owed tax.
“The collaborative approach will help people understand the importance of paying tax. Therefore, they will pay it voluntarily and be willing to reveal all their books.
“This new strategy will also include the views of the taxpayers and how they can be addressed, the LRA employees as they deal with taxpayers on a daily basis as well as the government’s side of view. Although we will not reach the target in this short period, we believe we will be able to lower most of it,” Mr Likhang said.
For his part, Mr Khasipe said a lot needed to be done in addressing the LRA’s challenges.
“The challenges that lie ahead of us are huge, hence the decision to adopt the turn-around strategy which will help review the past while focusing more on the future,” he said.
“There is a will by the people to do the right thing. Our role is to build on the compliance objective which will introduce an element of trust between the LRA and taxpayers for us to be able to tackle issues together.”
“In the past, we were cops and taxpayers were robbers but this time we will be service providers while they become our clients. We intend to build a culture of taxpaying compliance,” Mr Khasipe added.