Income tax as the name denotes is a tax chargeable directly on a person’s taxable income. The direct taxation of income justifies the classification of income tax as a direct tax. Income tax is administered and enforced through the provisions of the Income Tax Act 1993 (as amended) and its Regulations.

Income tax is imposed upon all persons earning income, being:

• Individuals (including, but not limited to, sole traders, employees, directors of companies, partners in partnerships, members of associations, individual beneficiaries of trusts, etc.);

• Trustees;

• Companies (including statutory corporations, and unincorporated associations and social clubs, but not including partnerships and trusts); and

• Non-residents earning income in Lesotho.

Income tax is assessed annually, though it is withheld and/or collected periodically. 

Different tax types under the income tax regime are discussed comprehensively below.