VAT HIKE, DUBAIS LEVY COMES INTO EFFECT WEDNESDAY

MBABANE – If importing a motor vehicle beyond the SACU border or purchase goods which have no VAT, be ready to pay up as from Wednesday.

Following the announcement by Minister of Finance to the effect that Value Added Tax (VAT) would be increased from 14 to 15 per cent, the Swaziland Revenue Authority (SRA)  has called upon businesses to get their ducks in a row in readiness for the latest developments. Director Communications Vusi Dlamini said businesses must be prepared for the 15 per cent rate. “We must also warn that the new rate is only effective on the August 1, 2018 and not immediately and we implore members of the public to alert us if anyone charges them VAT at the 15 per cent before the 1st of August,” said Dlamini.

The SRA last week convened workshops to engage business on how to deal with the VAT issue after the new rate. All businesses registered for VAT were engaged, but there was an expectation for a bit of complication for those who submit on a quarterly basis because in their reporting period in October, they would have to contend with both 14 per cent and 15 per cent.  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 up as from Wednesday. However, businesses and individuals who may want to claim their one per cent tax difference between today and tomorrow 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.

The tax difference affects customers who may have been used to the scheme to cross into Eswatini after producing invoices, had one per cent due to them. This one per cent was being collected by SRA on behalf of taxpayers. However, the SRA claimed posed an administrative and monetary burden for them, considering the forecasted increased numbers of refund claims that were anticipated to be handed in. On another note, Commissioner General Dumisani Masilela yesterday announced that the import levy on non-Southern African Customs Union (SACU) used vehicles of three and six per cent levy would also come into effect as from Wednesday. 

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