Border Clearance Procedures
IMPORTS – Use of Tax Invoices as a means of VAT collection
1. Border Clearance for Lesotho Vendors
The following process applies to all commercial imports into the Kingdom of Lesotho by the Lesotho vendors. This section covers largely goods originating from within the Southern African Custom Union (particularly from RSA).
The importer has to comply with all the Declaration procedure on the South African side prior to proceeding to the Lesotho side. For details on declarations with SARS click here www.sars.gov.za
Upon arrival to the Lesotho Customs, the importer submits declaration documents, after verification by Customs a risk based physical inspection may be conducted followed by the collection of revenue, then the release of the consignment.
The Kingdom of Lesotho together with the Republic of South Africa has entered into an agreement for prevention of fiscal evasion of taxes. This agreement allowed the two parties to enter into arrangements to ensure that the objective of prevention of physical evasion of vat is achieved. Consequently the Lesotho vendors who have purchased goods in South Africa are required to produce a valid tax invoice in terms of the South African VAT Act 1991 as proof of payment of vat for the goods in question. For the invoice to be fully acceptable to both Lesotho and South Africa for VAT refund purposes, the following conditions have to be complied with.
After verification of the documents against the actual goods, the importer may then pay the revenue due. If the importer is a registered vendor he/she has to fill in the refund envelope, in a case of individual and non-registered vendors instead of the envelope they may have to use the refund form. The valid tax invoice together with the declaration form are attached to either the form or envelope and submitted to LRA Customs for VAT payment purposes. Where method of payment is not a tax invoice the Customs officers at the border may collect the money equivalent to the 14% rate of the value of goods, issue the receipt prior to releasing the goods.
2. Border Clearance for Consumers / Private Shoppers
It is the obligation of all individuals to declare goods they are in possession of at the time they cross the Lesotho borders. It therefore is worth noting that failure to declare all goods is an offense which calls for penal provisions should it be detected.
If an individual not registered with the LRA for tax purposes imports goods that are worth M 5,000.00 and less, inclusive of RSA VAT, It is important to fill in the declaration form for the imported goods for purposes of trade data statistics.
An importer has to obtain LRA VAT Refund form from the Lesotho border when exiting to RSA, to be completed before returning. On return from RSA an importer has to declare the goods to SARS before proceeding to Lesotho.
It is worth noting that the import VAT payable at the Lesotho border is for goods worth M250.00 and above. In a case where imported goods were zero rated in RSA but not zero rated in Lesotho or when an invoice is not valid as per the validity requirements and such goods are valued at or above the M250.00 threshold the importer will pay the vat due at the border. If the imported goods are worth MORE than M 5,000.00 incl. RSA VAT, Obtain LRA VAT Refund Form and follow the South African declaration process prior to proceeding to Lesotho Customs
Importation of motor vehicles
Motor vehicles like other consignments can be imported and import vat collection arising out of motor vehicle importation may be conducted through the use of tax invoices or cash payment at the time of importation. Click for information on clearance of motor vehicles.
The RSA - Lesotho agreement
Requirements: Due to the current arrangement between the governments of the Kingdom of Lesotho and the Republic of South Africa, VAT charged on all goods purchased in RSA imported into Lesotho is claimed by Lesotho Revenue Authority (LRA) from the South African Revenue Services (SARS). This arrangement provides that an importer into Lesotho presents a valid tax invoice with all the characteristics outlined below. In this case no cash payment of VAT shall be required at the ports of entry into Lesotho on imported goods, rather the valid tax invoice is regarded as a payment method. Cash payment may only be resorted to should the tax invoice be invalid.
The import date for the goods in question must be within 90 days of the date of the issuance of the invoice. However, should the importer present a tax invoice that does not comply with the above characteristics, the VAT amount shall be payable in cash at the port of entry.
The use of this method of payment is an arrangement between Lesotho and South African governments only, it therefore excludes other SACU member states, thereby saying imports form these other countries are liable to cash payment for the import VAT upon importation Lesotho.