Five things you should know about tax filing.

Tax planning and compliance are important pillars of your financial plan. As a responsible citizen, it is important to fulfil your tax obligations, declare your income, educate yourself and comply because failure to do so has far reaching consequences.

This article discusses the five W’s that you should know about tax as you prepare to file your tax returns.

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·????? What is tax?

Tax is the compulsory contribution that is withheld or deducted from your income or business profits and paid over to the government. There are different types of taxes for example Personal Income Tax (PIT), Company Income Tax (CIT), Valued Added Tax (VAT) and Customs and Exercise. These taxes are collected by Revenue Services Lesotho (RSL) as mandated by the Government of Lesotho and in accordance with the Income Tax Act of 1993.

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·????? Why should you pay tax?

For a country like to Lesotho to provide health care, education, take care of old age pensioners and develop infrastructure such as roads and bridges, the Government of Lesotho needs income, which comes from the different taxes collected. When you pay tax, you are contributing to the development of the country.

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·????? Who should pay tax and file?

Taxes are paid by employees, individuals (including consultants), sole proprietor, partnership or companies i.e. small, medium and large enterprises, who are required to register as taxpayers, pay taxes and submit tax returns annually. There are pre-defined timelines to pay taxes depending on the type of tax.

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·????? When to file your tax returns?

The tax filing season begins on the 1st of April ?and ends on the 30th of June annually. During this period, all taxpayers are required to complete and file and their tax returns for the financial year ending 31st March every year.

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·????? Where do file your tax returns?

You do not need to submit your tax returns physically. You can now submit via the E-Taxation platform provided by the tax authority. This platform allows you to view tax balances, complete and submit returns, view previous submissions, amend, or generate accounts statements.

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Paying taxes is the right thing to do. What’s more, it adds to your overall financial well-being and keeps you in control of your finances. It also helps you to avoid financial pitfalls that may lead to heavy debt and/or blacklisting. Consult a tax specialist or advisor to help you comply. Likhomo!