Times Of Swaziland: BID TO EXEMPT TEXTILE WORKERS FROM PAYE FAILS

BID TO EXEMPT TEXTILE WORKERS FROM PAYE FAILS
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Nonduduzo Kunene on 11/03/2025 08:37:00


MBABANE - Textile workers are set to face financial strain as they will now be
subject to income tax, dashing hopes for an exemption despite pleas from MPs.
The decision follows recent wage adjustments that have pushed a significant
number of these workers into the taxable income bracket.
During the debate of the 2025/26 Budget Speech in the House of Assembly, members
of Parliament (MPs) urged Finance Minister Neal Rijkenberg to revise the tax
threshold and exclude textile workers from pay-as-you-earn (PAYE) deductions.
This appeal came after workers received a cost of living adjustment (CoLA) of up
to 12 per cent, and a further 10.25 per cent salary adjustment in the 2024/25
wage orders. These increases have resulted in some textile workers earning up to
E3 500 per month, exceeding the current tax threshold of E41 000 per annum.
Vulnerable
MPs, including Mafutseni MP Sabelo Mtetwa, Kubuta MP Masiphula Mamba and
Zombodze Emuva MP Thando Mkhonta, voiced concerns about the impact on the
financially vulnerable workforce. Mtetwa questioned the possibility of
exemption, suggesting alternative compensation methods.
Mamba highlighted the financial pressures faced by textile workers, noting their
low disposable incomes after essential expenses. He argued the expanded tax base
would disproportionately affect these workers.
Mkhonta pleaded for an industry-specific exemption, citing low wages and
demanding working conditions. He proposed raising the tax threshold to E5 000
per month to alleviate the burden.
“Can the minister consider raising the tax bracket to start at E5 000 to avoid
taxing textile workers?” he asked.
Bolster
However, Minister Rijkenberg remained firm, stating government is committed to
broadening the tax base to bolster national revenue. He emphasised the Kingdom
of Eswatini is actively seeking to increase both VAT and the progressivity of
income taxes.
“That said, here is a caveat government must raise revenues in situations
where many businesses have gone bankrupt while others remain fragile, and large
numbers of people are unemployed or coping on reduced incomes. Politically, this
is challenging. These measures will not increase revenues unless they are
followed by more effective revenue collection and improved taxpayer compliance,
which are unlikely to happen at the desirable level in the short run,”
Rijkenberg told the Finance Portfolio Committee.
In response to the MPs’ requests, Rijkenberg clarified income tax is
determined by individual income thresholds, not industry sectors. “The request
by the honourable member is noted, however, the Income Tax Order, as amended, is
currently the guiding legislation on such issues,” he stated.
He further emphasised, “The minimum taxable threshold is currently at E41 000
per annum. Any person earning above this threshold will be taxed regardless of
the sector of employment.”
This decision means anyone earning above the E41 000 threshold will be subject
to income tax, regardless of extra benefits in other sectors.
The government’s stance underscores its commitment to increasing revenue
collection, despite the financial challenges faced by many citizens.
The textile workers, who recently saw a modest wage increase, now face the
prospect of a significant portion of their earnings being deducted as income
tax, adding to their financial burdens.