By 
By Ncaba Ntshakala
The Minister of Finance, Neal Rijkenberg, revealed in Parliament when delivering the Mid-Term Review that the government plans to introduce a significant increase in the alcohol and tobacco levy by 2026/27 as part of efforts to boost domestic revenue collection.
This move is part of a broader strategy to reduce dependence on volatile SACU receipts and improve fiscal stability in the medium term. The government is also considering introducing VAT on digital services and increasing VAT in 2027/28 to further enhance revenue generation.
Rijkenberg highlighted that these measures, alongside improvements in tax administration systems, are expected to lead to a substantial increase in domestic revenue collection.
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This would support continued efforts to narrow the budget deficit, despite anticipated expenditure pressures driven by growing demand for public services. Projections show total revenue and grants are expected to grow by around 6 percent over the next few years, reaching E29.6 billion in 2025/26, E30.3 billion in 2026/27, and E35.1 billion in 2027/28.
The increase in domestic revenue is largely driven by taxes on income, profits, and capital gains, which are projected to grow by an average of 12.4 percent, largely due to a strong performance in personal income tax.
However, SACU receipts are anticipated to drop slightly in 2025/26, with a modest decline of 4.7 percent over the medium term. Despite this, non-SACU revenues are expected to contribute an average of 40 percent of total revenues excluding grants.
As part of the ongoing fiscal consolidation efforts, the government will continue to fund the SACU stabilisation fund to cushion against future volatility in SACU receipts.
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The continued improvements in Eswatini Revenue Services (ERS) tax administration and efficiency are expected to deliver positive results, with the domestic revenue performance aligning with the projected GDP growth of 8.3 percent in 2025.
