Times Of Swaziland: VAT HIKE HEADACHE FOR SWAZI GOVT

VAT HIKE HEADACHE FOR SWAZI GOVT
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BY KWANELE DHLADHLA on 19/01/2018 01:20:00


MBABANE – As South Africans brace themselves for a VAT tax hike, the Swazi
Government could be forced to work around the clock as to how the increase could
possibly affect the general public.
Despite the projection that an increase of one percentage point in Value Added
Tax (VAT) rate, could raise more than E22 billion in revenue for South Africa
next year, the cash strapped Swazi Government does not intend to hike VAT, at
least in 2018.  For both Swaziland and South Africa, VAT currently stands at 14
per cent.  Minister of Finance Martin Dlamini has categorically stated that
there were no intentions to hike VAT until such time when all effects of the
increase on Swazis have been comprehensively interrogated and understood at
administrative level.
He said there had not been any formal correspondence received from their South
African counterparts with regards to the widely reported VAT increase that could
be announced by Finance Minister Malusi Gigaba in his budget next month.
“We are not obliged to increase VAT because South Africa has increased it.
It’s a question of understanding how it will affect the general public if we
take that step. We cannot just hike VAT without having conducted a study,”
Dlamini explained.
When further probed to provide a precise answer on whether there would be an
immediate announcement of changes on VAT soon after the South African budget
next month, Dlamini emphasised: “Of course, we will not be increasing VAT soon
after South Africa makes the announcement.” An economist interviewed by the
Business Desk on condition of anonymity said government’s decision would only
be in the short term. He said considering Swaziland’s reliance on the South
African economy, which includes the local currency being pegged to the Rand, the
country would eventually follow suit by also hiking VAT.