Lesotho
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Lesotho's tax system is administered by the Lesotho Revenue Authority (LRA) and applies a progressive personal income tax (PAYE) with rates of 20% and 30%, denominated in the Lesotho Loti (LSL), which is pegged at parity to the South African Rand (ZAR). The two-bracket system is relatively simple, with income up to a specified threshold taxed at 20% and income above that threshold taxed at 30%. A tax credit system effectively creates a tax-free threshold for lower earners. Lesotho does not currently have a comprehensive mandatory social security scheme for the private sector, though the government has been working towards establishing a national pension framework. Public sector employees contribute to the government pension scheme. Lesotho applies a standard VAT rate of 15% on most goods and services, harmonised within the Southern African Customs Union (SACU) framework, with zero-rating on essential food items and exemptions for financial services, residential rentals, and educational services. The fiscal year runs from April to March, and employers must withhold PAYE and remit it to the LRA by the end of the month following the pay period. Lesotho's economy is driven by textiles and garment manufacturing, diamond mining, agriculture, and water royalties from the Lesotho Highlands Water Project. The Loti's parity with the South African Rand means that both currencies circulate freely, making currency management straightforward for employers. AfroTools provides free LRA-compliant PAYE calculators, VAT tools, currency converters, and salary breakdown calculators for Lesotho. All tools are updated for the current tax year and available free of charge.