As global trade continues to expand rapidly, ensuring tax fairness and efficiency has become a shared challenge for customs administrations worldwide. Recently, in the landlocked Kingdom of Lesotho, a Post-Clearance Audit (PCA) diagnostic mission led by the World Customs Organization (WCO) has quietly commenced, injecting new momentum into the modernization of the country's customs revenue system.
WCO Delivers Comprehensive PCA Assessment for Lesotho
From June 18 to 21, 2019, a team of WCO experts traveled to Maseru, the capital of Lesotho, to successfully implement a comprehensive PCA diagnostic mission for the Lesotho Revenue Authority (LRA). This initiative forms part of the HMRC-WCO-UNCTAD collaborative project funded by the UK's HM Revenue & Customs (HMRC) under the Commonwealth Heads of Government Meeting (CHOGM) framework and led by the WCO Mercator Programme. The project's core objective is to assist developing countries in enhancing customs administration capabilities and promoting trade facilitation.
The diagnostic mission aimed to thoroughly evaluate LRA's institutional arrangements, infrastructure development, and technical methodologies in conducting post-clearance audits. Through in-depth research, the WCO team provided tailored recommendations to help LRA build a more efficient and transparent revenue collection system.
In-Depth Analysis and Practical Cooperation
At the outset of the mission, WCO experts introduced LRA participants to the organization's latest concepts regarding post-clearance audits. This orientation deepened understanding of PCA's critical role in risk management and trade facilitation processes, while highlighting its alignment with Article 7.5 of the WTO Trade Facilitation Agreement (TFA) and the revised Kyoto Convention. As a vital customs control mechanism, PCA enables verification of enterprise declarations after goods release, effectively preventing tax evasion and safeguarding national revenue security.
Over subsequent days, the WCO team engaged in extensive consultations with multiple LRA departments, including the Audit Unit, Compliance Department, Risk Management Division, IT Application Development Unit, Trade and Customs Administration, Human Capital Management, Authorized Economic Operator Programme, Customs Clearance Process Unit (at Maseru Bridge), ASYCUDA World System Operations Support, and Legal Department. Through face-to-face discussions and field observations, the experts gained comprehensive insights into LRA's PCA operations while collecting feedback from various units. Notably, LRA staff demonstrated remarkable engagement and readiness to address future challenges throughout the process.
Diagnostic Focus Areas: Comprehensive Evaluation and Improvement Recommendations
The WCO assessment covered all critical aspects of LRA's post-clearance audit operations, identifying both strengths and areas for enhancement:
- Institutional Structure and Functions: Evaluating departmental arrangements for PCA operations, clarity of responsibilities, and inter-departmental coordination mechanisms.
- Audit Methodologies and Techniques: Reviewing the scientific validity of current audit approaches and the utilization of IT solutions to improve efficiency.
- Staff Competencies and Training: Assessing auditors' professional capabilities and available training opportunities for skill development.
- Information Systems and Data Management: Examining whether existing IT infrastructure adequately supports PCA operations and data governance protocols.
- Legal Framework and Policy Support: Verifying whether national legislation provides sufficient legal basis and policy backing for PCA implementation.
Based on these evaluations, the WCO team proposed specific improvement measures, including:
- Enhancing risk management systems through advanced data analytics to better identify high-risk entities
- Streamlining audit procedures to reduce processing times and improve efficiency
- Strengthening professional training programs for audit personnel
- Upgrading ASYCUDA World system capabilities to better support PCA functions
- Improving inter-departmental collaboration through enhanced information sharing
Future Prospects: Continued Partnership and Mutual Development
At the mission's conclusion, Ms. Makali Lepholisa, LRA's Core Operations Executive, welcomed WCO's preliminary findings and recommendations while expressing gratitude for the organization's ongoing support. She confirmed LRA's commitment to studying the suggestions and implementing necessary improvements to elevate PCA standards. The WCO team likewise thanked LRA management and staff for their cooperation throughout the mission and expressed anticipation for continued collaboration under the Mercator Programme to advance Lesotho's customs modernization.
This WCO diagnostic mission not only provided LRA with valuable self-assessment opportunities but also established a reference model for other developing countries. Through strengthened international cooperation to address common challenges, customs administrations worldwide can continuously improve their management capacities and contribute more significantly to global trade development.