Members of the House of
Assembly in Swaziland have voted against putting a 15 percent Value Added Tax
on electricity prices.
It happened during a debate
on the national budget on Wednesday (7 March 2018). In his
budget speech on 1 March
2018 Finance Minister Martin Dlamini said government wanted to review the VAT
Act to allow the tax to be added to tariffs. The order to raise VAT generally
by 1 percent to 15 percent goes ahead.
The VAT
increases were not well received
in Swaziland where seven in ten of the estimated 1.1 million population have
incomes less than the equivalent of US$2 per day.
The Times of Swaziland reported Acting Finance Committee Chairperson Marwick
Khumalo in a report said the VAT on electricity had been deferred pending a
cost-benefit analysis to be undertaken by the Ministry of Finance.
In his budget speech
Dlamini had said the VAT increase was needed to keep the kingdom in line with
neighbouring South Africa which announced its own increase in February 2018.
However, when the South African Treasury announced its
increase in VAT it
also announced measures to mitigate the impact of the VAT
increase on poor households with above inflation increases in social grants,
partial relief for inflation for the bottom three personal income tax brackets
(for people who do not receive social grants), a marginal increase in the tax
credits for medical aid contributions and maintaining the 19 zero-rated food
items.
Swaziland’s Finance Minister made no concessions.
Dlamini also announced additional taxation on alcohol and tobacco products. There are also plans to increase the fuel tax rate
by 20 cents from the current E3 and a review of user fees for mobile phones.
On Monday, members of
parliament in Swaziland sent
the national budget back to the
Ministry of Finance be reviewed because they said it did not meet the needs of
poor people and rural communities.
See also
SWAZI BUDGET A TALE OF WOES
MPS SEND BUDGET BACK FOR REVIEW
HOSTILE REACTION TO VAT INCREASE
BUILDING
HOTEL A BUDGET PRIORITY
CABINET
DEFIES KING OVER BUDGET
SWAZI
BUDGET GIVES PM NEW HOUSE
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