LRA to chase Ponzi investors

MASERU

Staff Reporter

IF you made profits from any of the Ponzi schemes that have mushroomed across the country don’t be shocked if you get a call from the Lesotho Revenue Authority (LRA).

This is because the LRA has been looking at ways to get a slice of the spectacular profits people have been making from the pyramid schemes.

And the law is on the taxman’s side because any income generated should be taxed regardless of how it was made.

For weeks debate has been raging in the LRA offices over how to treat income from the pyramid schemes, some of which are giving returns of up 100 percent per month. Emails have been circulated on the issue and some people have made suggestions.

The problem for the LRA so far, according to sources, is that it has no means to monitor hundreds of thousands of transactions through which money from the pyramid schemes is being moved.

Chasing each and every taxpayer who has benefited from the scheme might also be a logistical nightmare, the sources say.

But they also say this does not mean it cannot be done.

LRA spokesperson Pheello Mphana said it was the responsibility of every taxpayer to declare and pay tax on every income received.

“That is the expectation although it might be difficult to trace every income,” Mphana said.

Mphana confirmed that there had been some discussion about how income from pyramid schemes can be taxed but refused to give further details.

Sources in the LRA however told thepost that it might just be a matter of time before the authority finds a solution on how to deal with income generated from Ponzi schemes.

“Probably very soon there might be a breakthrough on how to deal with such income,” the source said.

Thousands of Basotho have invested in pyramid schemes, lured by a combination of promised huge returns and desperation.

The Central Bank of Lesotho has repeatedly warned against investing in pyramid schemes.

There are now signs that MMM Global, one of the biggest pyramid schemes, has hit troubled waters although some people continue to invest in it.