Free invoice generator and tax tools for Lesotho

Revenue Services Lesotho (RSL) collects the national taxes a small business meets: income tax, value added tax (VAT), fringe benefits tax and withholding tax, with customs and excise at the border. Individuals and sole traders pay personal income tax at two marginal rates, 20% and 30%. Companies pay 25% on ordinary profits, while manufacturing companies and commercial farming are taxed at 10%.

An employer is also a tax collector. It withholds income tax from employees' pay under section 156 of the Income Tax Act 1993, and a person who pays a resident contractor withholds 5% of the gross payment under section 157. Fringe benefits tax, such as on staff loans, falls on the employer rather than the employee and is charged at 40% of the taxable amount.

VAT is the only general consumption tax. It was introduced in July 2003 to replace the old General Sales Tax, and section 89 of the VAT Act 2001 repeals the Sales Tax Act 1995. Rates and thresholds are changed by regulation or Gazette notice rather than by a new Act, so the legal notices page on rsl.org.ls is the place to confirm a figure before relying on it.