Building a behavioral framework to increase tax compliance in Lesotho
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The Kingdom of Lesotho, a country of 2 million people in Southern Africa, finances most of its government expenditures through revenue from the Southern Africa Customs Union (SACU). However, in the late 2010s, Lesotho’s SACU revenues declined significantly, leading the country’s government to prioritize increasing levels of domestic revenue to finance its development program.
One of the major challenges to mobilizing domestic revenue in Lesotho was low voluntary compliance with tax regulations. To tackle this problem, in 2019, the government launched the Lesotho Tax Modernization Project.
The Government of Lesotho approached TDL to increase tax compliance by leveraging behavioral insights, ultimately promoting economic growth and reducing poverty.