The announcement by Swaziland Finance Minister Martin
Dlamini that Value Added Tax is to rise by 1 percent to 15 percent to put it in
line with neighbour and major trading partner South Africa has been criticised throughout the kingdom.
South Africa made the change last month (February
2018).
Dlamini said in his budget speech on Thursday (1 March
2018) he also wanted to find a legal way of putting VAT on electricity charges.
Electricity tariffs are already set to rise by 15 percent on 1 April 2018.
The VAT increase will affect people especially the
poorest, commentators in Swaziland said.
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.
Trade Union Congress of Swaziland (TUCOSWA) Deputy Secretary General Muzi
Mhlanga said, ‘The cost of living as we speak is too high for
the working class and such hikes are hard hitting and we are not happy with
what was announced by the minister.’
Federation of Swaziland Business Community (FESBC) Chief Executive
Officer Dudu Nhlengethwa was against the increase and said
businesses had not been consulted.
The Times Sunday newspaper
in Swaziland reported (4 March 2018) that the Swaziland
Electricity Company (SEC) was against imposing VAT on its charges. The
newspaper quoted SEC Marketing and Corporate Communications Manager
Sifiso Dhlamini saying, ‘Disposable income for the customer has not increased
but is still the same, so there will be an erosion of their purchasing power if
VAT will be added on electricity.’
Interviewed
by the Swazi Observer
newspaper Swaziland Revenue Authority (SRA) Commissioner General, Dumsani Masilela said the increase was rare
and inevitable. The Observer
reported, ‘He said it was inevitable because Swaziland had in the past
traditionally been aligned with South Africa where VAT is concerned due to
structural issues which make it hard for Swaziland to act unilaterally.’ He
added that the SRA had made extensive consultations on the VAT issue.
The Editor of the Observer
on Saturday Alec Lushaba, writing in his own
newspaper, said the increase in VAT meant, ‘that
certain goods and services which are normally accessible to ordinary members of
the society, in particular the poor, will no longer be available’. He added
that social grants (pensions) for people aged 60 or over had not been increased
in the budget.
Swazi Observer Group Managing Editor Mbongeni Mbingo, writing in the Sunday Observer,
(4 March 2018) said the increase in VAT did not consider, ‘what the
implication and impact really is going to be for an economy that already is on
its knees and obviously, with so much unemployment’.
He added, ‘But, this electricity hike and
the decision to impose VAT on it shows Cabinet’s fragrant disregard for the
situation on the ground.’
Sifiso Sibandze, writing
in the Times Sunday, (4
March 2018) said, ‘The long and short of it is, the budget was meant to further
disadvantage the already disadvantaged – the poor. It is a budget that will
make the poor poorer. Through the budget, government was legitimising his
intention of pick-pocketing the poor.’
See also
BUILDING
HOTEL A BUDGET PRIORITY
CABINET
DEFIES KING OVER BUDGET
SWAZI
BUDGET GIVES PM NEW HOUSE
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