In spite of a plethora of challenges that the country has been facing in recent times including the surge of the Covid-19 pandemic, the Minister of Finance Thabo Sofonea pointed out that the Lesotho Revenue Authority (LRA) has continued surpass its revenue collection targets.
In his Budget Speech before Parliament this week, Sofonea said that on the revenue collection side, LRA maintained excellent performance in support of Governmentâ€™s drive to provide services to nation. In the previous financial year, LRA collected M7.2 billion against the estimate of M6.4 billion, amounting to a surplus of M745 million on tax revenue collections.
â€œIn the current financial year, tax revenue collection is projected to be M7.4 billion against the estimate of M6.6 billion, creating a tax revenue collection surplus of M702 million. This trend is very pleasing when viewed against the backdrop of the economic hardships occasioned by the COVID-19 pandemic,â€ the speech reads.
The speech further indicates that, consistent with projected Gross Domestic Product (GDP) growth of 2.3 percent and inflation rate of 5 percent, total revenue collection including Southern African Customs Union (SACU) and grants is projected at M19.7 billion. Tax revenue will reach M9.5 billion, grants will average M2.3 billion, while non-tax revenue is estimated at 13 percent of the total revenue at M2.6 billion. SACU revenue is projected to fall below last yearâ€™s collection by M608 million and total M5.4 billion.
â€œAt the same time, expenditure is projected to cover 53.9 percent of GDP at M23 billion. Recurrent expenditure is projected at M16.3 billion while capital budget is expected to make up 18 percent of GDP, which is about M6.8 billion. The outcome of the said outlays will result into net borrowing of M3.3 billion which is estimated to account for 7.7 percent of GDP. This Government financing gap will be financed through a mix of Treasury Bonds and Treasury Bills as well as draw down of reserves to the tune of M1.3 billion.â€
For the financial year 2019/2021 LRA registered a revenue collection of M6.350 billion, realising a 13% surplus into the fiscus, which means the revenue authority exceeded the target by M745 million.
The LRA was given the mandate to collect M5.605 billion revised from the initial target of M7.591 billion, 35% reduction due to the pandemic.
This happened while several tax relief measures were implemented permitting for delayed first quarter payments, clients continued to meet their obligations.
The commissioner General of LRA Thabo Khasipe on his presentation in April 2019 said the authority had introduced a new strategy â€˜Rea Aha, 2.0â€™ which during its implementation is aimed at improving revenue, improving quality of services, automatic compliance and reduced cost of collection.
â€œAmid the tough economic landscape negatively affecting business operations, the LRA was able to remit M6.351 billion, registering a 13 percent surplus,â€ Khasipe has said.
In the previous financial year 2019/2021, LRA had surpassed its target with 13% still in the period of Covid-19.