Minister of Trade and industry Thabiso Molapo said the motor dealership industry has become a kind of money laundering hub which is quite costly to monitor.
Addressing a media briefing meant to clear the air on issues around regulations for vehicle dealers at the ministry headquarters in Maseru today, he said Lesotho is a member of Eastern and Southern African Anti-money laundering group, and as such has an obligation to combat money laundering in the country.
“Motor dealership has been identified as a high activity area for money laundering and the ministry of trade and industry is responsible for monitoring this industry to combat the activities of money laundering,” he said.
Molapo said in August 2020, the business licencing and regulations were published in a gazette. These regulations stated a number of conditions for dealers of vehicles which included that the licence has to be renewed twice a year and the license fee was M150 000 every 6 months which makes it M300 000 a year.
He said there was a quote of how many vehicles each dealer may import in a year and the vehicles were to be less than 8 years old and dealers have to produce import and export certification and have a bank account in Lesotho.
Molapo said at the time, the conditions were said to be too strict and the licence fee was said to be too high.
“The ministry was recalled to review the conditions and so he invited those who were complaining being the association of imported cars for talks and met with the car importers association on the 16 December 2020 and listened to them,” he said, adding that an agreement had then been reached which set the licence fee at M150 000 per annum in consideration of the concerns by other members of the public and the enterprises whence an amended new document was published in September 2021.
Molapo said today the conditions are that the licence fee for Basotho enterprises with an annual turnover of between M200 000 and M5 Million be M50 000 while the licence fee of M150 000 applies to large enterprises of turnover of over M5 million owned by foreigners.
He said the license fee is structured in a manner that allows Basotho to enter and remain in this sector.
He therefore, advised Basotho to start using technology to buy cars online as there are people who have already done so and have attested to fact that vehicles are much cheaper when bought online.
“I wish to inform Basotho that they can order vehicles directly from the suppliers. Nowadays most people have smartphones that can be used to place an order and purchase online.
“Basotho should be encouraged to use technology and explore available options before making big purchases. We are aware that some are already doing that and there is no reason why most of us cannot do the same. Costs may even be lower if one orders for themselves,” he said.
Molapo also spoke of the effects of used cars saying they emit more carbon into the environment than new vehicles.
“Lesotho is involved in climate change negotiations and like other member states on those negotiations, Lesotho has to take steps to minimize pollution including carbon emissions.
“We have learned of studies that show that used vehicles emit more carbon than new vehicles and therefore steps must be taken to control and minimize the emission of carbon in the air for the benefit of the next generations so that they can leave them a healthy environment.”
For their part, representatives of the Import Car Dealers’ Association said it was untrue that the ministry sat down with them to discuss the increase. They said there was no communication whatsoever between them and the ministry adding that they have complained to the ministry about this increase but that there hasn’t been any reply from the ministry.
Meanwhile, Advocate Letuka Molati of Molati Chambers says they are ready to institute a court case against government for what they label illegal and unfair costs imposed to the business community for motor vehicle traders’ license application. Molati told Newday this week that they will be approaching the courts of law this coming week regarding the 12 500% increase which the Ministry of Trade and Industry has imposed for the motor vehicle traders’ license application in the business licensing and regulations No.71 of 2020.