This paper quantifies the revenue-productivity gains generated by Lesotho’s recent tax-reform programme. Using administrative tax
records, national accounts and difference-in-difference estimates for the period 2019/20-2024/25, we find that reforms centred on
(i) the creation of a new Tax Policy Unit, (ii) phased improvements in administration following the 2023 TADAT diagnostic, and (iii)
the modernisation of VAT, excise and mining regimes raised real tax revenue per unit of economic activity by 0.8–1.1 percentage
points of GDP within three years. The effect is concentrated in VAT and corporate income tax, where compliance ratios rose by 12 %
and 9 % respectively, while average effective tax rates remained unchanged. Instrumental-variable estimates that exploit the
staggered roll-out of e-filing and risk-based audits across revenue offices indicate that at least half of the gains stem from higher
administrative efficiency rather than macroeconomic windfalls. Counterfactual simulations suggest the reforms have already offset
roughly one-third of the revenue volatility historically associated with Southern African Customs Union transfers. These findings
imply that carefully sequenced, donor-supported tax reforms can materially raise revenue productivity in small, transfer-dependent
economies without increasing statutory tax burdens.