MBABANE – The transport sector joins the Swazi public at large in audible relief that new VAT surcharges will not be levied on electricity or petroleum products.
This is as a VAT increase from 14% to 15% is set to hit on August 1. Unwilling to upset their constituents with a VAT hike weeks before a national election, Swaziland’s parliament refused to approve government’s 2018 finance package.
Finance Minister Martin Dlamini, an appointee of King Mswati III, did so unilaterally this week, using his power of office. However, Dlamini initially called for VAT to be attached to electricity sales, a first for the country and representing a new 15% tax on businesses and ordinary consumers.
The price of electricity was already raised 15% in April. The finance ministry has since shelved VAT application to electricity, and will also not apply VAT to petroleum products. Nevertheless, last week a R0.50 tax hike on petrol was announced. Swaziland’s government is relying more on tax revenues to pay its bills, because new investment in the country is negligible and the economy as a whole is the worst performing of any SADC country.
“The business community impressed on government that VAT on electricity would be one more hindrance to investment in Swaziland. There are other issues, but we were heard on that one,” Sandile Nxumalo, a Manzini businessman in the electricity-reliant communications sector told FTW.
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New investment in Swaziland is negligible and the economy is the worst of any SADC country.
