Value Added Tax Act, 2001
Act 9 of 2001
- Published in Government Gazette on 31 December 2001
- Commencement date unknown
- [This is the version of this document from 31 December 2001.]
- [This legislation was digitised using the Laws of Lesotho Volumes I – XLVII, which were produced by the Attorney General of Lesotho, as reference. As the volumes do not include precise publication dates, the last day of the year of publication has been used as the date of publication.]
1. Short titleThis Act may be cited as the Value Added Tax Act, 2001.
2. CommencementThis Act shall come into operation on a date to be appointed by the Minister by notice published in the Gazette.
3. InterpretationIn this Act, unless the context otherwise requires—"application to own use", in relation to goods or services, means applying the goods or services to a non-business use (including such use by a relative);"associate", in relation to a person, means any other person who acts or is likely to act in accordance with the directions, requests, suggestions, or wishes of the first-mentioned person whether or not they are communicated to that other person, and this case the second-mentioned person is an associate of the first-mentioned person;"auction" includes the sale of goods out-of-hand by the auctioneer;"auctioneer" means a person licensed as an auctioneer under the Auction Sales Proclamation, 19191;"capital goods" means plant and equipment (including spare parts therefor, but not including registrable motor vehicles) for use directly in manufacturing;"Commissioner" means the Commissioner of Value Added Tax appointed under section 74;"company" means a body corporate or unincorporate, whether created or recognised under a law in force in Lesotho or elsewhere, but does not include a partnership or trust;"consideration", in relation to a supply or import, means the total amount in money or kind paid or payable for the supply or import by any person, directly or indirectly, including any duties, levies, fees, or charges paid or payable on, or by reason of, the supply or import other than value added tax, reduced by any price discounts or rebates allowed and accounted for at the time of the supply or import;"enterprise" means any undertaking in the ordinary course of which goods or services are supplied;"exempt import" has the meaning in section 6(4);"exempt supply" has the meaning in section 6(2);"export" means—(a)in the case of goods, the delivery of the goods to, or the making available of the goods at, an address outside Lesotho as evidenced by documentary proof acceptable to the Commissioner; or(b)in the case of services, the supply of the services for use or consumption outside Lesotho as evidenced by documentary proof acceptable to the Commissioner, not being services which are supplied directly in connection with any movable or immovable property situated in Lesotho at the time of the supply;"finance lease", in relation to goods, means the lease of the goods where—(a)the lease term exceeds 75% of the effective life of the goods for income tax purposes;(b)the lessee has an option to purchase the goods for a fixed or determinable price at the expiration of the lease; or(c)the estimated residual value of the goods to the lessor at the expiration of the lease term (including the period of any option to renew) is less than 20% of its fair market value at the commencement of the lease;"goods" means all kinds of tangible movable and immovable property, but does not include money;"hire purchase agreement" means an agreement that is a hire purchase agreement for the purposes of the Hire-Purchase Act, 19742;"import" has the meaning in section 11(1);"importer" means—(a)in relation to an import of goods, any person who owns, possesses, or has a beneficial interest in the goods at the time of the import; and(b)in relation to an import of services, the person to whom the services are provided;"input tax" means value added tax paid or payable in respect of a taxable supply to, or a taxable import by, any person, but does not include additional tax;"international agreement" means an agreement between Lesotho and a foreign government or a public international organisation;"manufacturer" means a vendor who is licensed as a manufacturing enterprise under the Industrial Licensing Act, 19693;"manufacturing" means the substantial transformation of tangible movable property, but does not include construction, installation, assembly, transportation, power generation, or the provision of public utility services;"Minister" means the Minister of Finance;"money" means—(a)coins or paper currency that the Central Bank of Lesotho has issued as legal tender;(b)coins or paper currency of a foreign country which is used or circulated as currency; or(c)a bill of exchange, promissory note, bank draft, postal order, or money order,other than coins or paper currency that is a collector’s piece or is otherwise of numismatic interest;"nominated person" has the meaning in section 79;"objection decision" means a decision of the Commissioner on an objection filed by a person;"officer" means the Commissioner, any person in the service of the Government who is appointed to an office or is employed in the Department of Value Added Tax, and any other person appointed by the Commissioner to perform functions related to the enforcement and administration of this Act;"person" includes a partnership, company, trust, government, political subdivision of a government, or public international organisation;"public international organisation" means an organisation listed in Schedule I to this Act;"raw materials" means goods or services used directly in manufacturing that form part of the finished goods;"relative", in relation to an individual, means an ancestor of the individual, a descendant of the individual’s grandparents, or the spouse of the individual or of any of the foregoing;"services" means anything that is not goods or money;"tax" or "value added tax" means the tax chargeable under this Act;"taxable import" has the meaning in section 13;"taxable supply" has the meaning in section 12;"taxable transaction" means a transaction subject to value added tax under this Act;"taxable value", in relation to a taxable supply or taxable import, is determined under Chapter V of this Act;"tax period" means the period of one month ending on the last day of each of the twelve months of the calendar year;"trust" means any relationship where property is under the control or management of a trustee;"trustee" includes—(a)an executor, administrator, tutor, or curator;(b)a liquidator or judicial manager;(c)a person having or taking on the administration or control of property subject to another person having a beneficial interest in the property;(d)a person acting in a fiduciary capacity; or(e)a person having the possession, control, or management of the property of a person under a legal disability;"value added tax invoice" means an invoice required to be provided under section 24; and"vendor" means a person who is, or is treated as, registered under this Act.
4. Fair market value
5. Levy of value added taxSubject to this Act, value added tax is hereby imposed on—
Value added tax
6. Exempt supplies and exempt imports
7. Persons liable to pay tax
Supplies and imports
8. Supply of goods or services
9. Time of supply
10. Place of supply
Taxable supplies and taxable imports
12. Taxable supply
13. Taxable importAn import of goods or services is a taxable import unless it is an exempt import.
14. Taxable value of a taxable supply
16. Taxable value of a taxable import
17. Registration of vendors
18. Cancellation of registration
Calculation of value added tax payable
19. Calculation of value added tax payable on a taxable transaction
20. Calculation of value added tax payable on the invoice method for a tax period
21. Calculation of value added tax payable on the cash method for a tax period
22. Consequences of a change in accounting method
23. Credit for input tax
24. Value added tax invoices
25. Credit and debit notes
26. Bad debts
Procedure and administration
Part I – Returns and assessments
29. Deemed assessments
30. General provisions relating to assessments
Part II – Objections and appeals
31. InterpretationIn this Part, "Tribunal" means the Administrative Tribunal for Tax Appeals established under section 203 of the Income Tax Act, 19935.
32. Objection to assessment
33. Appeal to Tribunal
34. Appeal to High Court of Lesotho
35. Appeal to Court of Appeal
36. Burden of proofThe burden of proving that an assessment is excessive is on the person assessed.
Part III – Collection and recovery
37. Due date for payment of value added tax
38. Value added tax as a debt due to the Lesotho Government
40. Preferential claim to assetsFrom the date on which value added tax becomes due and payable, the Commissioner has a preferential claim, as provided in the Insolvency Proclamation, 19576, upon the assets of the person liable to pay the tax until the tax is paid.
41. Seizure of goods
42. Distress proceedings
43. Recovery of value added tax from recipient of the supply
44. Recovery of tax from third parties
45. Duties of receivers
Part IV – Refund of value added tax
46. Refund of overpaid value added tax
47. Refund of value added tax to diplomats, contractors and certain organisations
Part V – Records and investigation powers
48. Accounts and records
49. Access to books, records and computers
50. Notice to obtain information or evidence
51. Books and records not in Sesotho or English languageWhere any book or record referred to in sections 49 or 50 is not in the Sesotho or English language, the Commissioner may, by notice in writing, require the person keeping the book or record to provide at that person’s expense a translation into the Sesotho or English language by a translator approved by the Commissioner for this purpose.
Part VI – Taxpayer identification number
52. Taxpayer identification numberThe Commissioner may require a person to include the taxpayer identification number issued by the Commissioner to that person in any return, notice, or other document used for the purposes of this Act.
Part VII – Additional tax and offences
I – Additional tax
53. Additional tax for failure to apply for registrationA person who fails to apply for registration as required by section 17(1), (3) or (6) is liable for additional tax equal to double the amount of value added tax payable during the period commencing on the day by which the person was required to apply for registration under section 17(1), (3) or (6) until either the person Files an application for registration with the Commissioner or the Commissioner registers the person under section 17(10).
54. Additional tax for failure to file a returnA person who fails to File a return within the time required under this Act is liable for additional tax on the value added tax payable for the period of the return at the rate of 3% per month or part of the month the return is outstanding.
55. Additional tax for failure to pay value added tax when due
56. Additional tax in relation to recordsA person who fails to maintain proper records in a tax period in accordance with the requirements of this Act is liable for additional tax equal to double the amount of value added tax payable by the person for the tax period.
57. Additional tax in relation to false or misleading statements
58. Recovery of additional tax
II – Offences
59. Offences related to registrationA person who fails—
60. Offences related to value added tax invoices, credit notes and debit notes
61. Failure to file a return or pay value added tax when due
62. Failure to give securityAny person who, without any reasonable cause, fails to give security as required by section 39, commits an offence and is liable on conviction to a fine not less than M4,000 but not exceeding M12,000 or to imprisonment for a term not less than 2 years but not exceeding 6 years, or both.
63. Failure to comply with recovery provisions
64. Failure to maintain proper recordsA person who fails to maintain proper records in accordance with the requirements of this Act commits an offence and is liable on conviction to—
65. Failure to provide reasonable assistanceA person who fails to provide the Commissioner or an authorised officer with all reasonable facilities and assistance as required by section 49(3) commits an offence and is liable on conviction to a fine not less than M6,000 but not exceeding M12,000 or to imprisonment for a term not less than 3 years but not exceeding 6 years, or both.
66. Failure to comply with section 50 noticeA person who fails to comply with a notice issued under section 50 commits an offence and is liable on conviction to a fine not less than M6,000 but not exceeding M12,000 or to imprisonment for a term not less than 3 years but not exceeding 6 years, or both.
67. Improper use of taxpayer identification number or value added tax number
68. Failure to maintain secrecyA person who contravenes section 76, commits an offence and is liable on conviction to a fine not less than M8,000 but not exceeding M24,000 or to imprisonment for a term not less than 4 years but not exceeding 12 years or both.
69. Breach of section 86
70. False or misleading statements
71. Obstructing taxation officersA person who obstructs the Commissioner or an authorised officer in the performance of his or her duties under this Act, commits an offence and is liable on conviction to a fine not less than M4,000 but not exceeding M12,000 or to imprisonment for a term not less than 2 years but not exceeding 6 years or both.
72. Impersonating an officerAny person who holds out that he or she is an officer engaged in carrying out the provisions of this Act or an officer authorised by the Commissioner for the purposes of entry and search as contemplated in section 49, commits an offence and is liable on conviction to a fine not less than M6,000 but not exceeding M20,000 or to imprisonment for a term not less than 3 years but not exceeding 10 years or both.
73. Offences by companies
Part VIII – Administration
I – Office of the Commissioner of Value Added Tax
74. Appointment of Commissioner and Deputy Commissioner of Value Added Tax
75. DelegationThe Commissioner may delegate to any officer of the Department of Value Added Tax any power or duty conferred or imposed on the Commissioner by this Act, other than this power of delegation.
II – Forms and notices
77. Forms and notices; authentication of documents
78. Service of notices and other documentsUnless otherwise provided in this Act, a notice or other document required or authorised by this Act to be served—
III – Nominated person
79. Nominated person
IV – Application of Act to partnerships, unincorporated associations, trustees and agents
80. Application of Act to partnerships and unincorporated associations
81. TrusteesA person who is a trustee in more than one capacity is treated for the purposes of this Act as a separate person in relation to each of those capacities.
82. Agents and auctioneers
83. Currency conversion
84. Schemes for obtaining undue value added tax benefits
85. Goods requiring registration or clearance
86. Prohibition on advertising; Pricing on tax-exclusive or tax-inclusive basis
87. International agreements
88. Regulations and amendment of Schedules
89. RepealSubject to section 90, the Sales Tax Act, 19958 is repealed.
History of this document
Cited documents 1
Documents citing this one 7
- Crown v Nala Capital Advisors (CRI/A 2 of 18)  LSHC 23 (21 March 2019)
- Lesotho Dairy products v Minister of Finance (CONSTITUTIONAL CASE 7 of 2016)  LSHC 32 (8 May 2017)
- Lesotho Revenue Authority and Others v Olympic Off Sales (C of A (CIV) 13 of 2006)  LSCA 17 (20 October 2006)
- SELKOL 1983 (Pty) Ltd and Another v The Crown and Another (CRI/T 120 of 2011)  LSHC 57 (9 September 2013)
- The Lesotho Revenue Authority v Bosiu Consultancy (Pty) Ltd (C of A (CIV) 29 of 2018)  LSCA 142 (1 November 2019)
- The Lesotho Revenue Authority v Bosiu Consultancy (Pty) Ltd (C of A (CIV) 29 of 2018)  LSCA 28 (1 February 2019)
- The Lesotho Revenue Authority v Bosiu Consultancy (Pty) Ltd (C of A (CIV) 29 of 2018)  LSCA 42 (1 November 2019)