Tax incentives in Lesotho
- 0% corporate tax on manufacturing profit generated from exporting manufactured goods outside of the Southern African Customs Union (SACU)
- A maximum manufacturing corporate tax rate of 10% on profits for intra-SACU trade
- No withholding tax on dividends distributed by manufacturing firms to local or foreign shareholders
- No advanced corporation taxes are paid by companies on the distribution of manufacturing profits
- Training costs are allowable at 125% for tax purposes.
- Payments made in respect of external management skills and royalties related to manufacturing operations are subject to withholding tax of 10%
- Easy repatriation of manufacturing profits
- A VAT rate of 14% (ensuring harmonization with the RSA). Furthermore, the Lesotho Revenue Authority has introduced flexible VAT payment systems, to tax compliant firms, to ease cash flows.