In a bid to expand its exports, Lesotho Government announced a zero tax rate for certain clothing exporters, said Timothy Thahane, Finance Minister.
Lesotho's move to lower its tax was to increase investments and sustain the industry within the country.
According to ComMark Trust, an organization dedicated to reduce poverty in Southern Africa, Lesotho is the largest sub-Saharan exporter of clothing to the US.
Explaining the tax cutting policy of Lesotho, Andy Salm, a spokesman of ComMark said any manufacturer serving the US or European markets from Lesotho would pay no company tax.
However, this zero tax policy is eligible for only those manufacturers who promptly made their tax payments and possessed valid tax clearance certificate from the Lesotho Revenue Authority, added Thahane.
'Income generated from farming and manufacturing' will also be included in further tax reductions from 15 percent to 10 percent.
To ensure firms take advantage of the lower tax rate in SA and improve Lesotho's competitiveness, the country is cutting the general Corporate tax rate from 35 percent to 25 percent from April 1.
The finance department is also extending the upfront VAT refund scheme to cover all exporters, Thahane echoed.
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