Basotho are used as ‘fronts’

  MASERU – TRADE Minister Dr Thabiso Molapo has accused some foreign-owned second-hand car dealers of using locals as ‘fronts’ to avoid paying the new licence fees. Dr Molapo’s allegations comes as car dealers are up in arms against the government for increasing the annual operating licence fees from M600 to M150 000, a 24 000 percent jump. Local dealers however pay M50 000 and the minister says they can negotiate payment terms. This, Dr Molapo said, is part of the government’s policy to localise the sector which has been dominated by Asians. He however said some foreign dealers are now tinkering with their shareholding structures to give the impression that they are locally owned so that they pay M50 000 instead of M150 000. The minister says Basotho who are agreeing to be in such dubious deals are denying the government revenue and stifling economic growth. “This is despicable behaviour fuelling illicit financial flows and robbing Lesotho of economic growth,” Dr Molapo said in a statement on Monday. “We have had Basotho claiming to be majority shareholders in these dealerships,” he said. The minister was responding to concerns raised by the second-hand car dealers that the new fees will force them to close shop or push their prices beyond the reach of Basotho. The government however says anyone who calls themselves foreign investors should be able to afford the fee. It says the fee is meant to curb the influx of used cars and protect the environment. The minister said it is curious that the dealers are only complaining now after agreeing to the new fees when they were consulted during the review and amendment of the previous law and regulations. In 2020 the ministry first published the regulations that were later amended in 2021. This licence fee, Molapo said, is not that hefty for those considered to be foreign investors. “For Basotho owned businesses we charge them M50 000 however, we still open our doors for those who do not have the M50 000 and we work something out,” Molapo said. “What we want is for Basotho to be leaders, where they can be able, in this way there will be economic growth,” Molapo said. He added that they are aware that foreign car dealers are illegally repatriating money to their countries. He said this was possible because most dealers accept cash payments. “This industry is one of those industries that are high risk in relation to activities like money laundering and terrorism financing and needs to be regulated and under the ministry’s watch.” The licence fees, he said, need to be in alignment with Lesotho’s efforts to reduce carbon emissions. Dr Molapo also accused car dealers of short-changing Basotho by selling them broken cars. “We have had a number of people coming through seeking assistance asking the ministry to intervene as they have been sold cars in poor conditions.” “When they take the cars back the dealerships were not willing to assist them.” “We had to assist those Basotho and had inspectors checking out those dealerships. After that activity we had those dissatisfied buyers coming back to say they were assisted,” Molapo said.