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n Journal for Juridical Science - Tax laws harmonisation between Lesotho and the Republic of South Africa

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Abstract

Lesotho is geographically landlocked within the Republic of South Africa. Research has been done at border gates whereat Basotho shoppers are able to claim and gain reimbursement of the value-added tax amounts paid against shopping in South Africa. Basotho have to pay 10% general sales tax due on sales at the Lesotho side of the border. This arrangement is administratively difficult to implement and has therefore led to massive losses of sales tax revenue for Lesotho. Also, having acquired their trading stock free of value-added tax, branches of South African businesses are liable to commodity tax in Lesotho. Research has however revealed contrary practices as indicated. It is submitted that the existence of different laws governing economic activities in countries that cannot avoid interacting with one another leads to skewed distribution of resources amongst these countries. It remains unclear whether the provisions of the Lesotho valueadded tax law will address the widespread abuse of the system as well as the glaring evasion of the tax being experienced by Lesotho today. It is in the light of the abovementioned that the hypothesis of this article was formulated: that the efficient collection of tax revenue, the decline in the abuse of the tax system and the evasion of sales tax, will all occur to some significant extent if, amongst others, the Lesotho value-added tax legislation is in harmony with its South African equivalent. In conclusion the harmonisation of the tax rates provided for by statutes of the two countries is recommended.

Lesotho is geografies binne die Republiek van Suid-Afrika vasgevang. Navorsing is by grensposte gedoen waar Basotho-kopers geregtig is om terugbetaling te eis en te verkry vir betaling van belasting op toegevoegde waarde op inkopies in Suid-Afrika gedoen. Sodanige kopers moet dan 10% verkoopbelasting aan die Lesotho-kant van die grens betaal. Uit 'n administratiewe oogpunt is hierdie reëling moeilik uitvoerbaar en het tot massiewe verliese aan inkomste uit verkoopbelasting vir Lesotho gelei. Takke van Suid- Afrikaanse besighede wat hul voorraad vry van BTW verkry het, is daarbenewens verplig om verkoopbelasting in Lesotho te betaal. Navorsing onthul egter dat teenoorgestelde praktyke heers. Dit word aan die hand gedoen dat die bestaan van verskillende wetgewing wat ekonomiese aktiwiteite in lande reguleer wat nie interaksie tussen mekaar kan vermy nie, tot skewe verspreiding van bronne in die lande aanleiding gee. Dit is nie duidelik of die bepalings vervat in Lesotho se wetgewing wat belasting op toegevoegde waarde reguleer die wydverspreide misbruik van die stelsel en die ooglopende ontduiking van belasting wat tans in Lesotho voorkom, sal aanspreek nie. Dit is in die lig van bogenoemde dat die hipotese van hierdie artikel geformuleer is: dat die effektiewe invordering van belastinginkomste, die afname in die misbruik van die belastingstelsel en die ontduiking van die verkoopbelasting, grootliks sal plaasvind indien, onder andere, Lesotho se wetgewing wat belasting op toegevoegde waarde beheers in pas met dié van Suid-Afrika gebring kan word. Ten slotte word die harmonisasie van die twee lande se belastingkoerse aanbeveel.

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/content/juridic/26/3/EJC55464
2001-12-01
2016-12-06
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