THE Lesotho Revenue Authority (LRA) should be capacitated with necessary laws and regulations to be in a position to impose and exercise its powers against the South African Revenue Service (SARS), the same way the latter has been doing since December 2020.

This was said by a member of the portfolio committee on the economic and development cluster, Tšepang Tšita-Mosena on Monday.

She was backing the motion to accept the report on the Customs and Excise Bill of 2019 as tabled by the chairperson of the portfolio committee, Mahooana Khati. 

The bill will enable LRA to issue out the permits for the traders imports and exports services smoothly. It means that South Africa will no longer be in a position to take advantage of Lesotho because of its financial muscle.

In December last year, SARS implemented regulations that require both importers and exporters of goods to register with it in order for them to access clearance services.

This is especially the case where such export will be an indirect export, where tax will have been paid in South Africa.

In such instances, a valid tax invoice is no longer accepted by LRA as a form of payment for VAT due because, it implies that, an incorrect export procedure would have been used and therefore VAT payment will become due and payable immediately at the Lesotho border before goods could be imported into the country.  

The LRA advised during the same period that Lesotho importers who have not registered with SARS and do not have importer or exporter code to opt for direct export or import approach whereby the goods are delivered to the county of destination (Lesotho) by the seller and the VAT is paid directly to LRA by importer upon importation.

SARS started with the implementation of this requirement from December 10, resulting in a huge retaliation from local traders.

The requirement further involves importers and exporters having to register with SARS in order to access services within its clearance system.

SARS indicated that it is obliged by law to deal directly with only entities registered as taxpayers in South Africa. This means that only South African entities, duly registered as taxpayers may directly access the custom services.

According to SARS, all other foreign entities have to appoint these registered entities to represent them in accessing services including import and export, or they can apply to be registered as agents too.

Any South African individual or registered company may make application to become a registered exporter agent to act on behalf of a foreign principal, who in this case would be an importer or exporter from Lesotho.

However, with the proposed amendment of Customs and Excise Act of 1982, LRA will be able to have control over its customs duties. More revenue will also be collected by the revenue authority.