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The Board of Directors of the African Development Bank Group has approved a loan of US$4.25mn to the Lesotho Revenue Authority to provide digital tax services, including e-taxation and e-payment, that will broaden the country’s tax base and boost government revenue
The funds, to be sourced from the African Development Fund, the Group’s concessional lending window, will go to support the supplemental financing of the Lesotho Tax Modernization Project.
“The project will allow broadening of the tax base through simplifying and streamlining the tax regime and procedures for the small business and informal sector," said Abdoulaye Coulibaly, director of governance and financial management coordination, African Development Bank.
Lesotho’s economy has been negatively affected during the past two years, by sluggish global growth including in South Africa, a major trading partner, as well as political instability and the Covid-19 pandemic.
The project follows the Lesotho Tax Modernization Project (LTMP) approved in November 2017, and for which the African Development Bank Group provided US$7.09mn, in financing. It will benefit taxpayers as well as the Lesotho Revenue Authority. The authority has introduced VAT and improved border management processes.
The Bank’s portfolio in Lesotho, equivalent to US$79mn, comprises eight projects across the water and sanitation, energy, and ICT sectors, with nearly one-third of projects being multisectoral.