REVENUE SERVICES LESOTHO (RSL)
TAXATHON CALL FOR INNOVATION – SEPTEMBER 2026
CALL FOR INNOVATION
Revenue Services Lesotho (RSL) invites Basotho innovators to design and implement practical solutions to two tax compliance challenges.
The call is open to Basotho developers, researchers, entrepreneurs, designers and tax specialists.
TWO CHALLENGES
- Informal sector non-compliance
- Multinational tax evasion and refund abuse
ABOUT THE TAXATHON
RSL seeks approaches that help taxpayers comply with revenue laws, enable RSL to protect revenue, and provide management with reliable evidence for decision-making.
Innovators may combine technology, service design, data analysis and business process management to develop practical, sustainable solutions that can be easily implemented.
Key Dates:
- Online Q&A Session: 2 November 2026
- Submission Deadline: 6 November 2026
- Taxathon Event: 19–20 November 2026
CHALLENGE 1: INFORMAL SECTOR NON-COMPLIANCE
Tax Focus: Expanding the tax net
Problem Owner: Deputy Commissioner General Clients
Primary Users: General Clients, RSL Officers and Informal Business Operators
The Innovation Challenge
How might we help RSL make paying taxes attractive to informal businesses and expand the tax net, so that more businesses comply consistently at a manageable cost?
The Problem
The informal-sector industry has limited information about potential taxpayers and the ease of paying taxes. There is also under-declaration, misinformation and inconsistency in payments, making it difficult to distinguish genuine inactivity from undeclared trading.
RSL needs a clearer view of which businesses are active and the best way to serve the informal sector in order to add all taxable business activities to the tax net. Business operators need understandable requirements and an accessible way to maintain records and comply.
Poor visibility poses a risk of uncollected revenue and places compliant businesses at a disadvantage.
Where Can Innovation Help?
- Improve the identification and matching of potential registrants.
- Simplify registration and record-keeping.
- Help businesses understand filing and payment requirements.
- Give officers a manageable follow-up process.
Approaches may include assisted or mobile services, simple sales records, reminders, links to existing registration channels, or risk-based worklists.
Teams should show how their approach builds sustained compliance and avoids treating every informal operator or nil return as non-compliant.
CHALLENGE 2: MULTINATIONAL TAX EVASION AND REFUND ABUSE
Tax Focus: Wholesale and retail – VAT, Fast-Moving Consumer Goods (FMCG)
Business Owner: Deputy Commissioner Special Sectors
Primary Users: Special Sectors Auditors, Risk Analysts and Refund Auditors
The Innovation Challenge
How might we help RSL detect and investigate multinational tax avoidance or evasion linked to abusive tax planning and persistent refund claims, using clear evidence while recognizing lawful arrangements and legitimate refunds?
The Problem
Complex multinational enterprise (MNE) structures with bulky and complicated related-party transactions can obscure where profits arise and business activity takes place in Lesotho. This normally results in the Lesotho tax base being eroded, or locally derived profits being shifted to other tax jurisdictions, usually low- or no-tax jurisdictions where parent or sister entities are resident or located.
In some cases, this MNE practice results in undue corporate income tax (CIT) holidays due to perpetual loss carry-over provisions in the tax law. Related-party transactions may give rise to in-house loss creation.
This problem centres on business dealings between Lesotho entities and their foreign sister or parent entities, including intergroup services and financing arrangements.
The problem extends to credit VAT returns resulting from undeclared or unpaid VAT on imported services. Under-declaration of expatriate employment income, together with an unclear distinction between independent consultancy and employment where services are rendered by employees of a related party, exacerbates the problem.
Distinguish Risk from Wrongdoing
- Lawful tax planning is different from tax evasion.
- Base erosion and profit shifting can involve legal as well as illegal arrangements.
- Where a related party renders services through its employees, the resulting remuneration may constitute either a service fee (where a related party is considered a consultant) or employment income (where the employees are remunerated directly by the local entity). Reviewers must examine related-party engagements and establish what constitutes employment and independent consultancy.
- A refund position alone does not establish abuse. Reviewers must examine the reasons, supporting records and applicable law.
- Proposed solutions should preserve the timely processing of valid claims.
Scale of the Problem/Opportunity
Approximately M1 billion in annual tax is forgone. This is a preliminary workshop estimate, not a verified amount attributable solely to multinationals or refund abuse.
Where Can Innovation Help?
- Connect group structures, financial statements and tax records.
- Highlight unexplained related-party charges or profit patterns.
- Reconcile recurring VAT credits with invoices and trading activity.
- Use AI, rules-based analysis and specialist knowledge tools where appropriate.
WHAT TO SUBMIT
Present a working prototype or demonstrable service concept for one challenge.
Your submission should include:
- A clear user journey.
- Test results.
- The data required.
- Estimated operating costs.
- A practical pilot proposal.
- An explanation of which part of the problem the solution addresses and how it could connect to RSL processes.
Show how an RSL Officer or taxpayer would use the solution, including:
- An ordinary case.
- An exception.
- A case requiring human review.
Identify any policy changes or external agreements needed for implementation.
DESIGN FOR USE IN LESOTHO
- Build for the people who will use the service.
- Consider limited connectivity, language and record-keeping needs.
- Use mock or approved masked data for demonstrations.
- Protect taxpayer information.
- Make recommendations explainable and reviewable.
Solutions may use AI where it adds measurable value. Judging will consider results, usability, trust and practical implementation, using the proposed criteria outlined in this call.
EVALUATION AND NEXT STEPS
Proposed Judging Criteria
| Criteria | Weight |
|---|---|
| Taxpayer and Business Value | 25% |
| Performance and Evidence | 20% |
| Usability | 15% |
| Innovation | 10% |
| Trust and Compliance | 15% |
| Pilot Potential | 15% |
| Total | 100% |
From Prototype to Pilot
Each team should propose:
- A defined user group, test period, baseline, success measures and estimated resources.
- An appropriate RSL business owner, the data needed and any partner dependencies.
- What can be tested immediately and what requires operational or policy changes.
RSL can use the results to decide whether to refine, pilot or adopt a solution through its applicable processes.
Selection at the Taxathon does not establish a procurement commitment or authorize access to live taxpayer systems.
RULES OF PARTICIPATION
Disclaimer
- The ideas generated through this event remain the property of RSL and shall not be used anywhere else.
- RSL reserves the right not to pick the first-prize winner.
GLOSSARY
Informal Sector: Economic activities, businesses and workers that operate outside government regulation, taxation and legal protection.
Declarations/Tax Declaration: A formal return submitted to RSL that reports a taxpayer’s income, expenses, deductions and tax owed for a specific period, which RSL uses to work out or confirm how much tax must be paid or refunded.
Sustained Payment: Paying your taxes regularly and on time, every time, not just once in a while.
Tax Obligations: Everything you have to do as a taxpayer, such as registering with RSL, keeping records, filing returns and paying what you owe on time.
Simplified Business Tax (SBT): Taxpayers registered under SBT have a yearly turnover of:
Click the link to learn about the process: RSL Taxpayer Education