Times Of Swaziland: EXPLORE OTHER REVENUE STREAMS

EXPLORE OTHER REVENUE STREAMS
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By Thabiso Dlamini on 26/06/2019 00:30:00


ESWATINI’S problems by in large depend on how much money goes through the
hands of our government. When funds are limited in the G-wallet, the economy
spirals into a nose dive, and when money is flowing into the G-wallet, the
economy performs a little bit better. This is why government must explore other
revenue streams to fund the G-wallets besides taxing people’s incomes.
In economics, fiscal policy is the means by which government adjusts its
spending levels and taxation to monitor and influence a nation’s economy.
Along fiscal policy, there is monetary policy, which a country’s central bank
uses to influence the total amount of money in supply in an economy.
Fiscal theory provides that governments can influence macroeconomic productivity
levels by increasing or decreasing tax levels and public spending. Fiscal policy
is considered to be tight or contractionary when revenue is higher than spending
(government budget is in surplus) and loose or expansionary when spending is
higher than revenue (the budget is in deficit).
What Eswatini has become accustomed to is loose and expansionary fiscal policy
that has seen our government consistently spending money it does not have. This
country’s government does not really use the money you and I and every entity
that pays tax contribute to the G-wallet to influence for the better and balance
economic activities. No matter how bad the situation, we can never count on our
government to use our money for the greater good, that is, to stabilise the
economy and increase aggregate output and demand for goods and services.
Economy
Now that the economy hasn’t been growing for a while with only the same old
tired people and businesses to tax, the state of the G-wallet leaves a lot to be
desired. In essence, the amount of money at government’s disposal hasn’t
been growing despite the increased level of government spending that we’ve all
been witnessing in recent years.
And government is stuck on one outdated trick which is to keep increasing taxes
when the money pot keeps running dry. Basically taxes on personal and corporate
income, the SACU receipts, value added tax (VAT), fuel tax are keeping the
G-wallet afloat.
A bulk of that money gets burned through statutory commitments that include
paying civil servant salaries and government subventions to the many
parastatals, commissions and other quasi government entities. The rest of the
money is a mystery as to where it ends up, even the financial controllers within
government do not know where a bulk of the money meant for government services
goes.
Here is one idea on how to increase money for the G-wallet without squeezing
more money out of individual income tax: Eswatini needs to be more deliberate
and cut-throat on its imports from the SACU countries. Indeed, SACU is one of
the oldest customs unions in the world, with Namibia, South Africa, Botswana,
Lesotho and Eswatini as members.
The union maintains the free interchange of goods between members, and provides
a common external tariff and a common excise tariff to the customs area. What
happens is that all the customs and excise fees collected are paid into South
Africa’s National Revenue Fund, and then shared among members according to a
set formula. Nambia just recently received N$4.7 billion for the first quarter
this year coming from a total SACU income of N$19 billion during the 2017/19
financial year.
As a nation, let us use the union to our advantage so that we can increase
Eswatini’s share on the income from SACU customs and exercise fees. The
problem is that Eswatini has sold a large chunk of the retail sector to faux pas
investors from India, Pakistan, Bangladesh, etc, who have captured Eswatini as a
dumping ground for mostly fake goods from China, India, Bangladesh and the like.
While the country needs to move away from being a huge import economy and highly
dependent on SACU receipts to fund the fiscus, the goods emaSwati buy on a daily
basis should at least come from the SACU countries so that government can cash
in on them. Instead of rushing to tax emaSwati through the roof, instead of
amassing huge debt in loans for white elephant capital projects, and instead of
snatching the rug under the feet of emaSwati who operate in the retail sector by
ushering in fake investors from Asia with their boatloads of fake goods,
government needs to wake up and fix this mess that is making Eswatini lose out
on billions that could be made in SACU income. One can only hope that if our
government can wake up to strengthen other sources of revenue such as SACU,
individual taxpayers could get a break on their personal incomes.