LRA tax relief measures during the pandemic

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Photo by Olga DeLawrence on Unsplash

The government of Lesotho announced relief measures it will put in place to assist businesses in alleviating the impact the nationwide lockdown will have on them.

As a result, tax relief measures have been introduced which will apply only to The Tax Compliant Businesses and they come in two forms; tax relief measures and administrative relief measures.

Below we will cover tax related relief measures, and they are mostly on deferment and will ease cash flow problems faced by businesses in the midst of this pandemic.

Taxes covered under these relief measures are:

1. Company Income Tax (CIT)

Income Tax filing season will be extended to the end of September 2020.

CIT Relief Measures extended to Large Clients/Taxpayers (Big Businesses)

  • For the first quarter instalment, 40% will be deferred and 60% paid at the end of June 2020,
  • For the second quarter instalment, 20% will be deferred and 80% paid at the end of September 2020, and
  • Deferred Amounts will be paid from the end of October 2020 and be spread out into 6 equal monthly instalments to the end of March 2021.

CIT Relief Measures extended to Medium and Small Clients/Taxpayers

  • Through the extension of the filing season to the end of September, 100% of year end filingseason payment will be deferred;
  •  For the second quarter instalment, 20% will be deferred and 80% paid at the end of September 2020, and
  •  Deferred Amounts will be paid from the end of October 2020 and be spread out into 6 equal monthly instalments to the end of March 2021.

2. Simplified Business Taxation (SBT)

Non-essential businesses (public transport)

 The SBT payable during the nationwide lockdown will be waived, no SBT payment will be made.

Essential services (small retail businesses)

 No relief measures will be extended to this sector, the sector continued to operate during the nationwide lockdown. All SBT payments due for this sector should be made as per normal stipulated payment periods.

3. Pay As You Earn (PAYE) and Value Added Tax (VAT)

Non-essential businesses (closed businesses during the lockdown as per the Government Gazette)

  • April, May and June PAYE and VAT payments will be deferred,
  • Deferred Amounts will be paid from the end of July 2020 and be spread out into 8 equal monthly instalments to the end of March 2021.

Essential businesses

No relief measures for the businesses which were operating during the lockdown, filing and payment on PAYE and VAT should happen as per normal stipulated filing and payment periods.

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