VAT INCREASE EFFECTS

MBABANE – Businesses and individuals, who had been compelled to incur an extra cost to claim their per cent Value Added Tax difference between Eswatini and South Africa, will cease to pay come August 1.

This follows the gazetted notice issued by Minister of Finance Martin Dlamini to the effect that VAT would be increased to 15 per cent beginning from the coming month.

Swaziland Revenue Authority (SRA) Director Communications Vusi Dlamini said the ‘costly’ refund programme would cease to exist as soon as the gazetted notice came into effect. He explained that businesses and individuals who may want to claim their one per cent tax difference between today and July 31 would be allowed to do so at their expense.

“The tax refund programme will automatically come to an end now that VAT between Eswatini and South Africa will be at par,” said Dlamini.     

Businesses and individuals who imported goods from South Africa that were keen to claim the one per cent difference were expected to incur an extra cost of E50 in respect of administration costs.

Following the introduction of 15 per cent VAT by South Africa while the kingdom remained at 14 per cent, mainly due to legislative delays, the SRA resolved to facilitate the refund process for taxpayers who chose to utilise the Sekulula VAT Easy Scheme.
The scheme, which became operational in 2015, allows taxpayers who may have paid VAT in South Africa not to pay what is due to the kingdom at the border gate after producing invoices.

The SRA then claims the money from South Africa on the basis of a Memorandum of Understanding (MoU) between the South African Revenue Service (SARS) and SRA, a process which costs the tax collector approximately E3 million per annum, according to Commissioner General Dumisani Masilela.

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