Revenue Services Lesotho (RSL) will allow exemption for certain exporters entering the mountain kingdom once the new Taxpayers’ Identification Number (TIN) system comes into play on April 1, but questions remain over the tax authority’s digital readiness.
Essentially, the new indigenisation system requires shippers and agents to make use of an agent from Lesotho, appointed by the Agents of Foreign Firms Association of Lesotho (Affal), the only Maseru-approved entity to perform this function.
However, uncertainty over the impact of possible profit-sharing for transporters and their clients has resulted in non-compliance among agents based in South Africa, where most of Lesotho’s supply chain originates.
To cushion the blow, RSL has made provision for franchises and sole providers with established service level agreements to apply for exemption, but it remains anyone’s guess how this process will be applied.
“They’re not geared up for it,” said Stephen Segal, divisional director of clearing and forwarding at Value Logistics.
“Their computer systems have been changed, but they don’t seem to know how they’re going to handle exemptions.”
Segal said it raised the question about the efficacy of exemption if it hasn’t been properly interfaced with Lesotho’s new clearing processes.
“What it means is that as of April 1, whether you’re exempted or not, if you haven’t got a TIN your goods will not be allowed to enter Lesotho.”
Segal explained that most shippers from the Southern African Customs Union (Sacu), dealing with Lesotho, used agents that produced the relevant export and import documentation, uploading XML files into EDI systems and that unless a smooth changeover was enabled, the implementation could be a fiasco.
“We’re trying to sort things out and have asked for a six-month extension.”
It wouldn’t be the first time that RSL has faced delays with the implementation date.
Last year’s initial September 1 implementation was pushed out to New Year’s Day because of synchronicity issues with the Automated System for Custom Data (Asycuda), used by Sacu countries.
Asycuda and other digital clearing headaches aside, Segal said compliance with RSL was recommended.
“Agents should negotiate with local representatives from Lesotho. If it’s just about a TIN, costing about R4 000 a month, it’s worth complying. But if Affal-approved agents want profit-sharing based on volume shipped into Lesotho, it’s a different matter altogether.”
Fearing profit-share implications, many transporters and agents weren’t complying, Segal said.
Those who have already come on board with Lesotho’s TIN initiative have, in many instances, seen positive results.
“We have a client who says his sales increased. Another said it has helped streamline the administration process with his exports to Lesotho.”
Worst-case scenario?
“It could cause serious problems for Lesotho and its people,” Segal said.
“Big tech firms, for example, deal with Lesotho through South Africa. If spare parts stop flowing into Lesotho because of a sales agent issue, users of office and homeware appliances in Lesotho might soon find themselves with equipment not working anymore because export parts from South Africa haven’t been cleared to cross the border.”
