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Lesotho Revenue Authority Act No.14 of 2001
LESOTHO REVENUE AUTHORITY ACT NO. 14 OF 2001
ARRANGEMENT OF SECTIONS
PART 1 – PRELIMINARY
1. Short title and commencement
3. Duties of the Minister
PART II - LESOTHO REVENUE AUTHORITY
4. Establishment ofthe Authority
5. Functions of the Authority
6. Powers of the Authority
7. Taxpayer identification and exchange of information
PART III –THE BOARD OF THE AUTHORITY
8. Establishment ofthe Board
9. Vacation from office
10. Meetings of the Board
11. Disclosure ofinterest
13. Committees of the Board
14. Remuneration and expenses of members
15. Powers of the Board
16. Exemptions, etc.
PART IV – ADMINISTRATION OF THE AUTHORITY
17. Appointment of Commissioner-General
18. Tenure of office of Commissioner-General
19. General functions of Commissioner-General
20. Appointment of revenue commissioners,etc
21. Existing staff
PART V - FINANCIAL PROVISIONS
22. Revenue to be paid into the Consolidated Fund
23. Funds of the Authority
24. Accounts and audit
25. Annual reports
26. Financial year
PART VI – MISCELLANEOUS
28. Exemption frompersonal liability
30. Vesting of assets, liabilities, etc.
31. Reference to existing revenue departments
LESOTHO REVENUE AUTHORITY ACT 2001
AnActtoprovidefor theestablishmentoftheLesothoRevenueAuthorityasthe main body responsible for the assessment and collection, on behalf of the Government,ofspecifiedrevenue;fortheadministration andenforcementoflaws relating to such revenue and for related matters.
ENACTED by the Parliament of Lesotho
PART I – PRELIMINARY
Short title and commencement
1. ThisActmaybecitedastheLesothoRevenueAuthorityAct,2001andshall comeinto operation on such date as the Ministermay,bynoticepublishedintheGazette, appoint.
2. In this Act, unless the context otherwise requires –
“Authority” means the Lesotho Revenue Authority established under section 4; “Board” means the Board of the Authority established under section 8;
“Chairman” means the Chairman of the Board designated as such under section 8 (3);
“Commissioner-General” means the Commissioner-General of the Authority appointed under section 17 (1);
“existing revenue departments” means the Departments of- (a)Customs and Excise;
(b)Income Tax; and
within the Ministry of Finance;
“member” means a member of the Board; “Minister” means the MinisterofFinance;
“revenue” means the taxes, duties, fees, fines or other monies imposed and collected under the written laws, or the specified provisions of the written laws, set out in the Schedule.
Duties of the Minister
3. Notwithstanding Part II, it shall be the duty of the Minister-
(a)to determine and ensure the effective application of the fiscal policies ofthe
(b)to ensure theeffective coordination ofthe policies for the collection and preservation of revenue accounts.
PART II –THE LESOTHO REVENUE AUTHORITY
Establishment of the Authority
4. (1) There is established a body to be known as the Lesotho Revenue Authority which shall be –
(a)a body corporate with perpetualsuccession and a common seal; (b)in its corporate name, capable of suing and being sued;
(c)capable of holding, purchasing and otherwise acquiring and disposing of any property, moveable and immovable, for purposes of, or in the course of carrying out its functions; and
(d)doingorperformingallsuchactsandthingsasbodiescorporatemaybylaw do or perform.
(2)TheAuthorityshall,uponthecommencementofthisAct,replacetheexisting revenue departments.
Functions of the Authority
5. (1) The Authority shall be an agencyof the Government responsible for the assessment, collection and receipt of specified revenue and shall operate under the general supervision of the Minister.
(2)Without prejudice to the generality ofsubsection (1), the functions of the Authority shall be-
(a)to administer and enforce the laws set out in the Schedule; (b)to promote voluntary compliance with tax laws;
(c)to take such measures as may be required to improve the standards of service giventotaxpayerswithaviewtoimprovingefficiencyand effectivenessand maximising revenue collection;
(d)to take such measures as may be required or necessary to counteract tax fraud and other forms of fiscal evasion;
(e)toadvisetheMinisteronmattersof revenuepolicyandmattersrelatingtothe administrationandcollection of revenue under the laws listed in the Schedule; and
(f) to performsuch other functions, in relation to revenue, as the Minister may direct.
(3) The Minister may, by notice published inthe Gazette,amend the Schedule.
Powers of the Authority
6. The Authority shall, in the discharge of its functions, have power-
(a)tostudyrevenuelawsandproposeanysuitablechangestotheMinister,which maybemadetoanylaw forthepurposeofimprovingtheadministrationof,and compliance with, revenue laws;
(b)tocalculatetheadministrativecosts, compliancecostsandtheoperationalimpact of intended legislative changes, andtoadvisetheMinisteraccordingly;
(c)tocollectandprocessstatisticsneededtoprovideforecastsofrevenuereceipts and the effect on yield of any proposals forchanges in revenue laws, and to advise the Minister accordingly; and
(d) to take such other measures as it deems necessary or desirable for the achievement of the purposes or provisions of this Act.
Tax payer identification and exchange of information
7. (1) The Authority shall, with the approval of the Minister, by notice in the Gazette,providefortheestablishment,maintenance, and application of systems for the convenientandeffectualidentificationoftaxpayersfor thepurposeofco-ordinated administration of the revenue laws of Lesotho.
(2) Withoutprejudicetosubsection(1),it shallbelawfulforofficersintherevenue departments oftheAuthority to exchange orfurnisheach otherwith informationor documents concerning any taxpayer and for the purposes of the discharge of functions under this Act.
PART III - THE BOARD OF THE AUTHORITY
Establishment and composition of the Board
8. (1)ThereisestablishedaboardoftheAuthoritywhichshallbethegoverningbodyof the Authority.
(2) The Board shall consist of the following persons:
(a)one senior representative of the following Ministries or bodies as the case may be,whoshallbeappointedbytheMinister in consultation withtheMinistries or bodies-
(i) Ministry of Finance;
(ii) Ministry of Industry, Trade and Marketing; (iii) Central Bank of Lesotho;
(iv) Lesotho Institute of Accountants;
(v) Lesotho Chamber of Commerce & Industry; (vi) Lesotho Association of Employers;
(b)onememberappointedbytheMinister fromtheprivatesector,whoshallbe appointed on the basis of his professional knowledge and experience in finance, commerce, legalor economic affairs; and
(c) the Commissioner-General, who shall be Secretary.
(3)AmemberoftheBoardshallbeapersonofhighintegrityandshallhaveno proven record of tax evasion.
(4) The Minister shall designate the Chairman of the Board from amongst the members and the members shall elect a Vice-Chairman from amongst their number:
Provided that if the Chairman is designated from the public sector, then the Vice- Chairman shall be elected fromthe private sector, and vice versa.
(5) Every member shall, personally, attend meetings of the Board, and where a memberisunabletoattendanymeetingoftheBoardhemayrequestthathisapologies forfailuretoattend berecorded.In suchcircumstances,amembermay,inhisabsence, andwiththeapprovalof theMinistryorbodywhichherepresents,nominateaseniorand experienced person to represent him.
(6) A member shall not, by virtue only of his appointment to the Board, be deemed to be an officer in the public service.
(7)A member shall hold office for a period of 3 years from the date of his appointment and shall be eligible for re-appointment at the expiry of that period.
(8) TheMinistershall,bynoticeintheGazette,publishthenamesofthepersons appointed asmembers.
Vacation from office
9. (1) A member shall be deemed to have vacated his office- (a)upon the expiry of the period of his appointment; (b)upon his death;
(c)ifheceasesemploymentwith,ormembershipof,theMinistryorbody,asthe case may be, which nominated him;
(d)ifhe is adjudged insolvent; (e)if he is convicted -
(i) for an offenceundersection11(2);
(ii) for an offence which involves moral turpitude.
(f) if he is absent, without the permission of the Board, from 3 successive meetings of the Board ofwhich he has had notice;
(g)upon notice in writing of his intention to resign his office;
(h)if he becomes, by reason of mental or physical infirmity, incapable of performing his duties as a member;
(i) ifanycircumstancesarisethat,ifhewerenotamember,wouldcausethat member to be disqualified for appointment as a member.
(2)Wheneverthereisavacancyintheofficeofamember,theMinistershall, in accordancewithsection 8andbynoticepublishedintheGazette,appointanotherperson, nominatedbytheMinistryorbody,asthecasemaybeauthorityor institution which nominated the original member, to fill the vacancy for the remainder ofthe period.
(3) Subject to section 10 (4), the Board may act notwithstanding any vacancy in the membership of the Board and any decisions made shall be valid.
Meetings of the Board
10. (1) The Board shall meet at such places and at such times as the Chairman may determine, and shall meet at least once every month.
(2)AnordinarymeetingoftheBoardshall beconvenedafteratleast7dayswritten notice to the members.
(3)TheChairmanmay,athisdiscretion,andshall,atthewritten requestof3 ormore members of the Board and within 5 days of such request, cause an extraordinary meeting of the Board to be summoned at suchplace and time as he may appoint.
(4)TheChairman,orinhis absence,the Vice-Chairmanshallpresideatmeetingsof the Board, and the quorum of any meeting of the Board shall be 4 members.
(5)In the absence of both the Chairman and Vice-Chairman the members present and formingaquorum shallelectoneofthememberstopresideoverameetingoftheBoard, andthemembersoelectedshallexerciseallthepowersandperform allthedutiesofthe Chairman.
(6)Subject to this Act, the Board may make standing orders for the regulation of its proceedings andbusinessortheproceedings andbusinessofanyofitscommittees and may vary, suspend or revoke any such standing orders.
(7)MinutesofeachmeetingoftheBoardoracommitteeoftheBoardshallbekept by the secretary and shall be continued at the succeeding meeting.
shall have, in the event of an equality of votes, a casting vote in addition to his deliberativevote.
(9) Thevalidityofany act, decisionorproceedingsoftheBoardshallnotbeaffected byanyvacancyamongthemembersorbyanydefect subsequently discovered in the appointmentofamemberorbyreasonthat somepersonwhowasnotentitledtodoso took part therein.
Disclosure of interest
11. (1)If amemberacquiresanypecuniaryinterest, direct or indirect,inanymatterand ispresentatameetingoftheBoardatwhichthematteristhe subjectof consideration by the Board, he shall, as soon as practicable after the commencement of the meeting, discloseallthematerialfactstotheBoard,andshallnottakepartin theconsiderationor discussion of, or vote on any question with respect to, the matter.
(2)Amemberwhocontravenessubsection(1)commitsanoffenceandshallbe liableonconvictiontoimprisonmentforaperiod ofnotlessthan1yearbutnot exceeding 5 years or to a fine notless than M2, 000 but not exceeding M10, 000.
12. (1) TheBoardmay,initsdiscretion,atanytimeandfor anylengthofperiod, invite any person to attend any meeting of the Boardforthepurposeofassistingoradvisingthe Board in respect of any matter under consideration by the Board.
(2) Any person invited pursuant to subsection (1) may take part in the deliberations of the Board at any meeting he attends, but shall not be entitled to vote on any matter at any meeting of the Board.
Committees of the Board
13. (1) The Board may establish such numberof committees as the Board shall deem appropriate to perform such functions andsuch responsibilities as the Board shall determine.
(2) The Board shall appoint the chairmanofeachcommitteefromamongstthe members.
(3) AnofficeroftheAuthoritydulyappointedinwritingbytheCommissioner- Generalshallbesecretarytoanycommitteeof theBoard,andshall,ontheinstructionsof the chairman of the committee convene meetings of the committee.
(4)Theprovisionsofsection10relatingto themeetingsoftheBoardshall,mutatis mutandis, apply to the meetings of any committee.
Remuneration and expenses of members
14. (1) MembersshallbepaidfromthefundsoftheAuthoritysuchsittingallowanceas the Board may, subject to the approval of the Minister, determine.
(2) TheBoardmay,withtheapprovaloftheMinister,makeprovisionforthe reimbursementofanyreasonableexpenses incurredbyamemberoramemberofa committee of the Board in connection with the business of the Board or the committee.
Powers of the Board
15. (1) In the dischargeof its functions under thisAct, the Board may-
(a)direct the Commissioner-General to furnish it with any information, reports or other documents which the Board considers necessary for the performance of its functions;
(b)giveinstructionsandorderstothe Commissioner-General in connection with the management, performance, operational policies and implementation thereof, of the revenue departments of the Authority;
(c)formulateanddeviseasystemforensuring,throughinternalauditsystems, the correct processing of all tax cases;
(d)on the recommendation of the Commissioner-General approve such organizational structures asthe Commissioner-General may
consider necessary for the dischargeof the functions of the Authority;
(e) prescribe such administrative measuresas may be required to safeguard the revenue;
(f) exercise disciplinary control over all staff of the Authority.
(2)TheBoardshallnotinterveneinthe determinationofanyrevenueassessment, revenue liability of, or tax appeal by, any taxpayer.
16. (1) The Board shall recommend to the Minister –
(a)criteria or factors by reference to which any exemption, mitigation, deferment or remission of any revenue may be granted; and
(b)procedurestobefollowedingrantinganyexemption,mitigation,defermentor remission of any revenue and the Minister shall by notice published in the Gazette,publishwithin60daysofhisdecision,specifythe criteria or factors and the procedures so recommended.
(2)TheMinistermay,bynoticepublishedinthe Gazette, exempt,mitigate, defer or remit any revenue in accordance with the criteria published pursuant to subsection (1).
(3) TheCommissioner-GeneralshallsubmittotheBoardquarterlyreportsonthe total amount of revenue remitted or foregone in respect of each ofthecriteriaspecified under subsection (1).
(4) The Board shall, within 3 months of the end of the financial year of the Authority, submit to the Minister a report setting out the total amount remitted or foregonepursuanttosubsection(2),andtheMinistershall,within30daysfromthedate of submission, cause it to be published in the Gazette.
(5) TheMinistershall,within60daysfromthedateof publicationofthereportin the Gazette, lay the report before Parliament.
PART IV- ADMINISTRATION OF THE AUTHORITY
Appointment of Commissioner – General
17.(1) ThereshallbeaChiefExecutiveoftheAuthoritytobecalled the Commissioner- General whoshallbeappointedonmeritbytheBoardonsuchtermsandconditionsas the Board may determine.
(2) TheappointmentandtermsandconditionsofserviceoftheCommissioner- General shall be subject to approval by the Minister.
(3) TheCommissioner-Generalshall,subjecttothegeneralsupervisionandcontrol of the Board, be responsible for-
(a)the day to day operations of the Authority;
(b)the management of the funds, property and business of the Authority;
(d)the effective administration and implementation of the provisions of this Act. (4)TheBoardshallconductanannualperformanceappraisalwithregardtothe
performanceoftheCommissionerGeneral,andareportthereof,shall,within30days fromthe end ofthe financial year ofthe Authority, be submitted to the Minister.
Tenure of office of Commissioner - General
18.(1)TheCommissioner-Generalshall,subjecttosubsection(2),holdofficefora period of 3 years and shall be eligible for re-appointment at the discretionofthe Minister.
(2) The Board may, subject to the approval of the Minister, terminate the appointment of the Commissioner-General for-
(b)inability, incapacity or incompetenceto performthe duties of his office.
General functions of Commissioner - General
19.(1)TheCommissioner-Generalshalldevotehisfulltimetothedutiesofhisoffice and shall not, without the prior approval of the Board, hold any office of trust or profit, other than that of Commissioner-General or engage in any occupationforrewardoutside the office of Commissioner –General.
(2)The Commissioner-General may, subject to this Act and to any general or specific directionsoftheBoard,delegateanyofhis functionsinrelationtoarevenuelawtoa revenue commissioner or any other commissioner or officer.
(3)The Commissioner-General or, in his absence such officer of the Authority as the Commissioner-Generalmaydesignateinwriting shallattend meetingsoftheBoard and any committee of the Board but shall not vote on any matter:
Commissioner-General or such other officer to withdraw from the meeting.
(4)TheCommissioner-Generalshall,ontheinstructionsof theChairman,convene meetings of the Board.
Appointment of Revenue Commissioners etc.
20. (1) TheBoardmay,ontherecommendationoftheCommissioner-General,andon suchtermsandconditionsastheBoardmaydetermine,appointonthebasisofmerit, such number and grades of revenue commissioners or other commissioners in relation to any revenue law as the Board may think necessary or desirable for the efficient and effective discharge of thefunctions of the Authority.
(2) The Commissioner-General may, on such terms and conditions as the Board may determine,appointotherofficersandstaff of the Authority subordinate to the Commissioner-Generalasmayberequiredforthe performance of the functions of the Authority.
21.(1)UponthecommencementofthisAct, a public officer employed in the existing revenuedepartmentsmay,withinaperiodtobe prescribedbytheAuthorityapplytothe Authorityforemploymentandifheischosen, he shall be employed by the Authority and shallbedeemedtohaveretiredfromthePublicServicefromthedateofhisassumption ofdutieswiththeAuthorityandheshallbeentitledtosuchterminalbenefits,ifany,due to himunder the appropriate legislation.
(2) A public officer who does not apply for employment with the Authority or whose application has not been successful in securing employmentwith the Authority, may be re-deployedinthePublicServicesubjectto availabilityofasuitablepositionasmaybe determined by the Minister responsible for the Public Service.
(3)Where no suitable position is available in the opinion of the Minister responsible forthePublicService,suchofficerasreferredtoinsubsection(2)shallbedeemedto have been retired fromthe Public Service pursuant to the Public Service Act 1995¹.
PART V – FINANCIAL PROVISIONS
Revenue to be paid into the Consolidated Fund
22. All revenue collected by, or due and payable to, the Authority under this Act shall be paid into the Consolidated Fund.
Funds of the Authority
23. (1) The funds of the Authority shall consist of –
(a)2%oftherevenueestimatedinthefinancialestimatesforeachfinancialyear to be collected by the Authority under this Act;
(b)such monies as the Minister may, after consultation with the Board, allocate as bonus in case of exceptional performance;
(c)such monies as may be received bythe Authority under subsection (2); and
(d)such monies as may otherwise vestin or accrue to the Authority. (2) The funds of the Authority-
1988², be payable to the Authority in monthly installments on or beforethebeginningofeachmonthandmay,subjecttotheapproval of the Minister, be takenfromrevenue collections;
(b)specifiedinsubsection(1)(b)shall bepayabletotheAuthoritywithin one month after the end ofthe three-month period.
(3) The Minister may, on the recommendation of the Board, by notice published in the Gazette, revise the percentages of revenue in subsection (1) (a) and (b).
(4) Any funds received by the Authority in respect of a financial year which are not expendedbytheendofthatfinancialyearshallbeplacedinareservefundtobe expended subject to the budget of the Authority for the ensuing financial year.
(5) The Authority may-
(a) acceptmoneybywayofgrantsordonationsfromanysourceinor outside Lesotho;
(b)subject to the Loans (Statutory Bodies) Act 1975³ and the approval of theMinister,raisebywayofloansfrom anysourceinoroutside Lesotho, such money as it may require for the discharge of its functions; and
(c) charge and collect fees in respect of programmes, publications, seminars,documents,consultancyservices and other services provided by the Authority.
(6) TheAuthoritymay,subjecttotheapproval of the Minister, invest in such manner as it thinks fit such of its funds as it does not immediately require for the performance of its functions.
Accounts and audit
24. (1) The Authority shall cause to be kept proper books of accounts and other records relating to its accounts.
(2) The accounts of the Authority shall be audited annually by independent auditors appointed by the Board and approved by the Minister.
(3) Notwithstanding subsection(2),theAuditor-Generalmayexaminethebooksof accounts of the Authority at therequest of the Government.
25.(1)TheAuthorityshallassoonaspracticable,butnotlaterthan 3monthsafterthe expiryofeachfinancialyear, submittotheMinisterareportconcerningits activities during that financial year.
(2) Thereportreferredtoinsubsection(1)shallbeinsuchform astheMinistermay approve, and shall include informationonthefinancialaffairsoftheAuthorityandthere shall be appended to the report-
(a)an audited balance sheet;
(b)an audited statement of income and expenditure;
Minister may direct.
(3)TheMinistershall,duringthemeetingof theNationalAssemblynextfollowing receiptbyhimofthereportreferredtoinsubsection(1),laythereportbeforethe National Assembly, and the Authority may publish the report for sale to the public.
26. The financial year of the Authority shall be a period of 12 months commencing on, 1st Aprilineachyear,andendingon31stMarch in the following year, or on such other dates the Minister may specify by Notice published in the Gazette:
ProvidedthatthefirstfinancialyearoftheAuthoritymaybesuchshorterorlonger period than 12 months as the Minister shall determine but being not less than 6 months or more than 18 months.
PART VI – MISCELLANEOUS
27. (1) Every member of the Board, the Commissioner-General, revenue commissioner or anyotherpersonemployedbytheAuthorityin the carrying out of the provisions of this Act, shall regard and deal with as secret to any unauthorized person, all documents and informationrelatingtotheincome,expenditureorotherfinancialdealingsorstatusof any taxpayer or other person involved in anyoperations in furtherance of the purposes of thisAct,andallconfidentialinstructionsinrespectoftheadministrationofthisAct which may come into his possession or to hisknowledge in the course ofhis duties.
(2)TheprovisionsoftheIncomeTaxAct1993,theCustomsandExciseAct1982 and the Sales Tax Act 1995 relating to the preservation of secrecy by officers and other personsdischargingfunctionsundertheAct shall,mutatismutandis,applytopersons dischargingfunctions under this Act.
Exemption from personal liability
28.NomemberoftheBoard,anycommitteeoftheBoard,oran employeeofthe Authority shall, inhispersonalcapacity, be liableincivilorcriminalproceedingsin respect of any act or omission done in good faith in the performance of his duties or functions under this Act.
29. (1) The Minister may, on the recommendation of the Board, make Regulations for the carrying into effect theprovisions of this Act.
(a)respectingthetermsandconditionsofservice,includingpensions,gratuities and other retirement benefits, of all members ofstaffofthe Authority;
(c)prescribingthecodeofconductforallmembersofstaffoftheAuthority,a breach of which shall constitute a disciplinary offence;
(d)prescribing the procedure for the conduct of disciplinary proceedings;
(f)respecting the performance targets of the Authority.
Vesting of assets,liabilities etc.
30. (1) All property, except any such property as the Minister may determine, by notice publishedin theGazette,whichimmediatelybeforethecommencementof thisActwas vestedintheGovernmentfortheuseoftheexistingrevenue departmentsforpurposesof thewrittenlawssetoutintheScheduleshall,onthecommencementof thisAct,and without further assurance, vest in the Authority, subject to all interests, liabilities, charges, obligations and trusts affecting such property.
(2) Except as otherwise provided in subsection (1) in relation to property, all contracts,debts,obligationsandliabilitiesofthe Governmentattributabletotheexisting revenue department before the commencement of this Act shall remain vested in the Governmentand may be enforcedby or against the Government.
(3) All legal proceedings and claimswhich before the commencement of this Act are pendinginrespectofrevenuetowhichthewrittenlawssetoutintheScheduleapply shall be continued or enforced by or against the Authority in the samemanner as they would have been continued or enforced before the commencement of this Act.
Reference to existing revenue departments
31. Upon the coming into operation of this Act-
(a)allreferencestotheDirector of CustomsandExcise,theCommissionerof SalesTax orCommissionerof IncomeTaxinthelawsspecifiedinthe Schedule or any other law shall be constructed as references to the Commissioner-General;
(b)any reference to the existing revenue departments in the laws specified in the Schedule or in any other law shall be deemed to be a reference be the Authority.
(c)except as provided in paragraph (a) any reference to an officer of the existing revenuedepartmentshowsoeverdesignatedinthewrittenlawsspecified inthe Schedule or in any other law shall be deemed to be reference to the Authority.
1. Proclamation No. 4 of 1964
2. Act No. 13 of 1995
3. Order No. 6 of 1988
4. Act No. 9 of 1993
5. Act No. 12 0f 1982
6. Act No. 14 of 1995
7. Act No. 22 of 1975
LAWS RELATING TO REVENUE (sections 2, 5(2)(e) and 31)
1. Customs and Excise Act 1982
2. IncomeTax Act 1993
3. Sales Tax Act 1995
4. Value Added Tax 2001