Women and Law in Southern Africa Research and Educational Trust Lesotho (WLSA) executives have been released on bail. They are charged with 100 counts of tax evasion, which relate to an amount of M822,773.61 in outstanding taxes owed to the Revenue Services Lesotho (RSL).
Reading indictment papers in court to the accused, Resident Magistrate, Lerato Ntelane, confirmed that the first accused is the WLSA with the second and third accused being the organisation’s Executive Director, Libakiso Innocentia Matlho and Programs Director, Mamosa Amelia Mohlabula-Nokana respectively. They are charged with “a tax evasion scheme devised and used” for five years from 2018 to 2022.
Ntelane set out how Matlho and Mohlabula-Nokana are charged on 100 counts of contravening Section 188 (1) (a) or (b) of the Income Tax Act No. 9 of 1993, read with sections 188 (2) and (4) of the Income Tax Act. The duo is also charged with contravening Section 178 (a) of the Income Tax Act read with Section 156 of the Income Tax Act.
Both accused, Matlho and Mohlabula-Nokana, were released on M10,000 bail and they paid M150,000 surety. They are set to reappear in court on September 25, 2023. The accused were ordered not to interfere with crown witnesses and to attend all remands.
In May 2022, MNN Centre for Investigative Journalism reported that Matlho and Mohlabula-Nokana are under investigation following official complaints from WLSA’s disgruntled employees that they have been syphoning donor funds for their private use.
The European Union as well as the Global Fund are donors who confirmed at the time that they had received a petition from WLSA employees detailing how Mathlo and Mohlabula-Nokana were fleecing donor-funded projects.
The Directorate on Corruption and Economic Offences (DCEO) had also confirmed to MNN that it was looking into the allegations that the pair had syphoned funds from multiple donor-funded projects, disguising the funds as payment for employees. But employees say the money never reached them and accuse the pair of taking the money.
Matlho and Mohlabula-Nokana’s indictment papers set out how the WLSA has an obligation in terms of the provisions of the Income Tax Act of 1993 to submit signed monthly pay-as-you-earn returns to the RSL showing the true and correct amounts of the employment income of its employees and the amounts of tax withheld for each employee.
As MNN’s investigation suggested, Matlho and Mohlabula-Nokana appear to have falsely declared the gross employment income of WLSA employees by concealing a portion of each employee’s employment income and not paying the RSL the required tax on this concealed income.
In its case against the executives, the state has alleged that the salaries of employees of WLSA were split into two portions with one portion being declared to the RSL and tax being paid on such salaries, while the other portion of the salaries of the employees of WLSA was concealed from the RSL and no tax was withheld or remitted to the RSL.
Magistrate Ntelane stated that this alleged concealment of a portion of the salaries of WLSA was done with the “knowledge and or consent or assistance or instruction of accused 2 [Matlho] and accused 3 [Mohlabula-Nokana] as directors of WLSA. Accused 1 [WLSA] was in terms of the Income Tax Act 1993 obliged to remit all Pay As You Earn withheld from its employees to the RSL”.
Ntelane said it is alleged that, as directors of the WLSA, Matlho and Mohlabula-Nokana were “knowingly involved in the non-disclosure of gross employment income and taxable income in the PAYE returns of WLSA to the RSL and personally benefited from the tax evasion scheme they had devised during their tenure of office as the directors of WLSA”.
Matlho and Mohlabula-Nokana are charged with of contravening section 188 (1) (a) or (b) of the Income Tax Act No. 9 of 1993 read with section 188 (2) and (4) (a) of the Income Tax Act of 1993 In that:
- In 2018-2022 at or near Maseru, WLSA represented by Matlho and Mohlabula-Nokana acting in concert and sharing common intention or purpose, unlawfully and knowingly or recklessly filed or caused to be filed, pay-as-you-earn returns with taxation officers of the RSL, which paye tax returns were false or misleading in a material particular or omitted information without which the said payee tax returns were misleading.
- In the payee tax returns for the periods 2018-2022 the Accused made statements that WLSA’s employees earned M2 737 644.93 whereas in truth and in fact WLSA concealed employment income in the amounts M6, 042, 559.43 on which income tax is due and payable in the amount M822, 773.68.
Matlho and Mohlabula-Nokana are further charged with contravening section 178 (a) of the Income Tax Act No.9 of 1993 read with Section 156 of the Income Tax Act 1993 in that:
- upon or about the periods 2018-2022 at or near Maseru WLSA represented by Matlho and Mohlabula-Nokana acting in concert and sharing common intention or purpose, unlawfully and knowingly or recklessly failed to withhold pay-as-you-earn from the employment income of the employees of WLSA for periods 2018-2022 for 100 times. The accused failed to withhold payee in the amount of M822, 773.68, on un-declared salaries amounting to M6,042,559.43.
- Had the accused truthfully withheld, declared, and remitted to the RSL all the payee on un-declared salaries RSL would have collected payee amounting to M822, 773.61 which payee remains owing, due, and payable to the RSL.
If found guilty, Ntelane said Matlho and Mohlabula-Nokana could face a M10,000 fine or two-year imprisonment, or both.
Attorney Monaheng Rasekoai representing Matlho and Mohlabula-Nokana told the court that “we object to charges on all accused”.
Rasekoai further made an undertaking to file an application to challenge in the High Court against the constitutionality of sections of the Criminal Procedure and Evidence Act.
