Lesotho - Taxation

In 1960, a review of the tax structure was undertaken with a view toward ending the dual tax system, which made a distinction between Basotho and non-Basotho. It was decided that a basic tax, previously paid only by Basotho, would be paid by all male residents. A graded tax and a scaled income tax, both payable by all persons irrespective of race or sex, were subsequently imposed. The maximum tax rate for individuals is 35%, and corporations are taxed at a flat rate of 35%. There was a sales tax of 15% in 1993, subsequently reduced to 10%. After delays of over a year, in July 2003 Lesotho replaced its sales tax with a value-added tax (VAT) system with a standard rate of 14%.