1. Overview
2. Investment Policy
3. General Incentives
4. Free Trade Zones
5. Export Incentives
6. Financial Assistance
7. Regional Incentives
8. Industrial Financing
9. Development Programmes and Incentives for Specific Industries
10. Tax
Start-up costs: an amortisation deduction is allowed for expenditure incurred in starting up a business to produce income subject to tax as if it were incurred for depreciable asset.
Research and Experimental costs: a deduction is allowed for research and development expenditure (section 40).
Manufacturing activities:
- Rate of withholding tax paid on interest, royalties, management charge, natural resource payments etc.
- No withholding tax on dividends of manufacturing income.
Approved Training expenditure: A deduction of 125% incurred for training or tertiary education is allowable (section 39).
Interest deduction: Business principally engaged in money lending is entitled to a deduction of interest in excess of 3:1 debt-to-equity ratio (section36)(2).
Fringe benefits tax (FBT) benefits provided by an employer to an employee are not taxable in the hands of an employee but the burden is shifted to an employer. However, the FBT is fully deductible against the employer's income.
Superannuation Funds: Generous deductions are allowable in respect of contributions to superannuation funds, allowing deduction up to a ceiling of 20% in regard to employment income
Expatriates taxpayers solely present in Lesotho for the purpose of providing technical assistance are subject to concessional treatment:
- Fund managers are not bound to give an undertaking to withhold tax from any payment (periodic or lump sum) made to expatriate taxpayers.
- Expatriates taxpayers: are not taxed on property income derived from a foreign source or from disposal of an investment asset generating foreign-source income.
Other Tax Investment Incentives: A dividend paid by a resident company shall not be included in the gross income of a resident shareholder.
10.1 Rates
Manufacturing and Agricultural sectors enjoy concessional tax rate at 15%
10.2 Deferral Period
10.3 Tax Holiday
10.4 Depreciation
A deduction is allowed under section 41 for the depreciation of the taxpayer's asset on
Group Assets included Depreciation:
|
25% |
|
20% |
|
10% |
|
5% |
10.5 Other