COMPANIES SAVE E232M ON COMPANY TAXES

MBABANE – Companies saved a hefty E232 million which could have been pumped into government coffers through company tax in 2017.

The Swaziland Revenue Authority (SRA) has reported that total collections for company taxes were recorded at E1.5 billion against a target of E1.7 billion, which is a 13.4 per cent below target performance.
“This underperformance was mainly due to non-implementation of anticipated legislative amendments, these amendments were expected to bring an additional E232 million in company tax revenue,” reported that SRA in its 2017 annual report which has been signed off by Board Chairman Ambrose Dlamini and Commissioner General (CG) Dumisani Masilela.

Target

It was, however, stated that despite the below target performance, company tax revenues had shown an increase of 9.2 per cent against 2016/17 and an improvement of 0.1 per cent  in their ratio as a percentage of Growth Domestic Product (GDP) reflecting an improved collection performance.
The SRA pointed out that the increase in revenue for company taxes was driven by increasing revenue from the information and communication, financial and wholesale and retail sectors that jointly contributed 83 per cent to the growth in revenue for 2016/17.

Amendments

An independent economist who spoke to the Business Desk on condition of anonymity said the revenues generated by the SRA showed efficiency on the part of the authority. He said the fact they reached targets showed that something good was being done by officials when it comes to vigilant tax collection.

“The revenue collected was good but there still remains a strong need to diversify sources of revenue,” he said.
President of the Federation of the Swaziland Employers and Chamber of Commerce (FSE&CC) Andrew Le Roux had advised there was a need to consider the manner in which the taxpayers, especially businesses, concerns were treated to avoid a situation where amendments could be described as harsh.

“It would be deeply concerning if the rights of businesses will further be entrenched through the amendments,” said Le Roux.
It has also been previously advised by the President of the Federation of the Swaziland Business Community (FESBC) Tum Du Pont that any of the proposed amendments should not negatively affect Foreign Direct Investors (FDI).
 “We plead with government to consider the fact that we are competing with other nations with friendly tax laws to attract investment. Therefore, it would be folly to make tax laws harsh but expect Swaziland to be a preferred investment destination,” said Du Pont.

It was also mentioned that taxes collected from individuals through Pay As You Earn (PAYE) accounted for 97 per cent of taxes collected from individuals and from individuals who had other sources of income other than employment income, such as directors of businesses and the self-employed.

“Taxes from individuals are the largest contributor to domestic tax revenue accounting for 34.1 per cent of domestic revenue and 58.2 per cent of income tax revenue,” reads the report in part. 
During the year under review, it was stated that collections from individual taxes were recorded at E2.662 billion against a target of E2.237 billion.

“This is 18.6 per cent above target performance and a growth of 22.4 per cent compared to 2015/16. Positive performance for taxes from individuals benefitted from    an increase in civil servants salaries by a larger magnitude than anticipated,” reported SRA. Under indirect taxes, Value Added Tax (VAT) amounting to E2.407 billion was collected in 2016/17 against the set target of E2.285 billion.

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