EXCLUSIVE RELIANCE ON TAX SELF-DEFEATING - BE

MBABANE - One of the challenges faced by the business sector has been government’s inclination to exclusively rely on tax and customs receipts in order to steer the economy out of danger.

This was an observation made by Business Eswatini (BE) CEO Nathi Dlamini. He was speaking during the Post- Budget webinar organised by the Central Bank of Eswatini (CBE) in collaboration with the Economics Association of Eswatini (ECAS) last Thursday. In many instances in the past, the exclusive reliance on tax, according to BE, has proven to be self-defeating. “By the way, customs receipts, which the country disproportionately relies on, actually come from our trucks that source goods from the customs union and then correctly declare at our border posts. These businesses belong to Business Eswatini as paid-up members. It is therefore the private sector that carries the fiscal burden of the country,” stressed Dlamini. Speaking during the same event, ECAS Professor President Mike Matsebula, felt the increasing budget deficit was derailing the move towards fiscal consolidation.

Issue

“The minister should be applauded for having treaded carefully on the issue of taxes,” he said. The Minister of Finance Neal Rijkenberg, who was part of the webinar, had announced no tax increases in his budget speech about a month ago. Dlamini, on the other hand, lauded the Post-COVID Economic Recovery strategy, saying it was a good one, but was quick to highlight key issues regarding the plan. “The private sector is part of it too. Our very lives as a country depend on this strategy but it has zero funding. We find this paradoxical at best. Government is the sponsoring entity of this strategy and the private sector is the boots on the ground for government. “Please find funding for the strategy because donor-fatigue is increasingly becoming evident within the private sector,” said Dlamini.

Meanwhile, the accommodative monetary policy stance adopted by the Central Bank of Eswatini was lauded by BE. The repo rate fell to 3.75 per cent at the end of the past year. “To this end, Business Eswatini would like to thank the Central Bank governor who kept borrowing costs at their absolute minimum,” said Dlamini.

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