Lesotho - Tax Modernisation Project (LTMP)

The Tax Modernisation Project (LTMP) is an Institutional Support designed to address weaknesses and targets areas for improvement that are linked to the main causes of weak tax administration in Lesotho. The Project is focusing on improving efficiency and services delivery, increasing Value Added Tax (VAT) compliance, and broadening tax base. Further, it will support LRA to consolidate and deepen reform by focusing on (a) redesigning and upgrading business process, (b) developing an enabling legal and institutional framework, (c) introduction of modern information and communication technology to increase tax compliance and efficiency in tax administration, and (d) promoting peer learning and experience sharing with similar national revenue authorities in the region. The operation will complement the effectiveness of the Bank’s ongoing projects by strengthening Government capacity to raise domestic revenue and providing fiscal space for priority public expenditures including counterpart funding for ongoing operations. The Project has three components: (i) Enhancing tax modernisation, (ii) Institutional strengthening, and (iii) Project Management Support. Reflecting the lessons of past support, more emphasis will be given to strengthening national capacity and ownership of the Project as well as adopting innovative approaches to capacity building through peer learning and partnering with other Revenue Authorities in the continent. The estimated total cost is UA 5.56 million (including 10% Government of Lesotho’s contribution).