By Lesotho Times

Copyright lestimes

. . . as govt departments fail to remit PAYE to taxman

Mathatisi Sebusi

THE retirement funds of government employees are in jeopardy due to the persistent failure by government departments to remit Pay As You Earn (PAYE) taxes to the Revenue Services Lesotho (RSL).

RSL Commissioner General, ‘Mathabo Mokoko, made this revelation when she appeared before Parliament’s Economic Cluster Committee, stating that the deep-seated problem was troubling.

She explained that while PAYE was deducted from civil servants’ salaries every month, many government departments do not forward the money to RSL.

“The PAYE in question is deducted monthly from civil servants’ salaries, but some institutions are not remitting it to RSL,” Adv Mokoko said.

“We engage in prolonged negotiations, but where commitments are ignored, we are left with no choice but to seize assets. This is always done under tax directives, which function like court orders.”

She warned that the non-remittance of PAYE is brewing a social and financial crisis.

“What concerns us most is that non-payment of PAYE will ultimately affect civil servants. These are people whose tax is deducted monthly, but not submitted. If such an employee retires or dies, they may receive nothing – or their dependents will suffer – all due to negligence by chief accounting officers.”

Her remarks came in response to complaints from committee members that RSL’s seizures of non-compliant taxpayers’ properties were crippling institutions and private businesses.

Motimposo legislator, Makatleho Motsoasele, said RSL was viewed as heavy-handed.

“There is an outcry from the business community that there is a lack of communication or negotiation between them and RSL. They complain that you refuse to issue them with tax clearance certificates, seize their properties, and block them from entering the border despite having proof of payment. This impacts their businesses, especially those that rely on lorry deliveries.”

She urged RSL to be flexible and even consider tax waivers in exceptional cases, but Adv Mokoko insisted that property seizures were never the taxpayers’ preferred solution.

“Asset seizure is never our first option but, rather, a final step after years of failed negotiations.

“Our focus is to ensure that every cent due to the government is collected. When government departments owe tax, we work through a dedicated government desk, staffed by managers and officers who deal directly with those institutions.”

On border blockages, she said part of the problem stemmed from fraud.

“Some business owners present fake proof of payment, but the funds never to reflect in our systems, which creates accountability issues for RSL, especially at border posts,” she said.

She also said RSL was working with banks to improve real-time communication between banking systems and RSL to prevent delays at border posts.

The Commissioner General also confirmed that RSL had recently seized properties from the Lesotho College of Education (LCE) and Loti Brick for unpaid taxes.

LCE lost seven vehicles over unpaid PAYE of M9.6 million. Meanwhile, Loti Brick had its immovable property in Mazenod seized for a tax debt of M7.4 million, including unpaid Corporate Income Tax, Fringe Benefit Tax, and PAYE.

The embattled brick manufacturer has been in financial crisis for years and announced a temporary closure in September last year, which saw hundreds of workers being retrenched in June 2024.

The retrenched workers are yet to receive their severance packages.

The revelations startled Chair of Chairs, Mokhothu Makhanyane, who admitted the committee had been concentrating on complaints from businesses without fully appreciating RSL’s position.

“I am concerned that if hospitals and schools fail to pay tax to RSL, the delivery of essential services will be severely affected.

“Please submit to this committee a list of all government departments and institutions that owe tax so we can approach them and understand why they are not complying,” Mr Makhalanyane said.

Adv Mokoko said affected institutions still had a chance to reclaim seized assets by settling their debts, failing which courts would authorise auctions. She maintained that RSL would not back down on its mandate.

“Our duty is to collect revenue without fear or favour, in line with the law. We cannot allow noncompliance — especially by the government itself — to jeopardise the financial future of Basotho workers.”

In a separate interview, workers’ union UNITE president, Malebohang Thai, told the Lesotho Times that the plight of Loti Brick workers remained unresolved.

“Workers have been laid off since June last year. They were promised half of their severance pay and informed that the company would be sold to a buyer who would absorb them.

“We have approached the government about this matter but, to date, nothing has been done to address the non-payment of workers. We were at some point told that government does not have money to pay the workers,” Ms Thai said.