Businesses Punch Holes On Govt’s Tax Debt Relief Programme

By: Phephile Motau and Zwelihle Sukati

The Eswatini National Provident Fund (ENPF) Stakeholders Forum was on Thursday hijacked to punch holes in the government’s Tax debt Relief Programme spearheaded by Eswatini Revenue Services’ (ERS) intended to write off E3 billion in tax penalties and interests owed by private businesses and parastatals. The stakeholders voiced their unhappiness about the planned tax debt relief Programme during a high-powered stakeholders forum at the Happy Valley Hotel Auditorium.

The ire of the different stakeholders was triggered by a presentation of the ERS Director Communications, Vusi Dlamini on his organization’s journey to digitalization. Soon after Dlamini’s presentation The Federation of Eswatini Business Community (FEBSC) Head of Transformation Mavela Sigwane came hard on ERS presentation, highlighting the finance ministry’s launch of the Tax Debt Relief Programme.

Sigwane said FESBC was against one of the programme’s conditions that owing taxpayers should start by making a down payment of 20 per cent of the principal debt and further make an undertaking with the ERS of how to pay the outstanding debt stretching to 12 months so that the accumulated tax penalties and interests can be written off. “This is not a deal and as FESBC we reject it. Where will the 20 per cent come from?”

Ndzingeni Member of Parliament (MP) Lutfo Dlamini P Dlamini questioned the Finance Minister, Neal Rijkenberg’s authority in coming up with the deal. MP Dlamini wondered why the minister waited for so long when many businesses crumbled and closed. Meanwhile Rijkenberg told the Eswatini Financial Times that the government is hoping to collect more tax and prevent companies from shutting down by writing off an E3 billion tax debt. The minister clarified that there was an E9 billion outstanding tax bill and they felt that if they did not introduce the tax debt relief programme, they would probably collect zero of the E9billion. The minister said the amount did not include the principal taxes but was for the penalties and interests that were accumulated by business establishments due to their failure to remit taxes on time.

“If we write this off, of the E6 billion that we have not written off, we will probably recover a large amount of that because the people will be encouraged to use this three-month window to come and declare their taxes,” he said.

He said they could even declare if they did not have cash, as they would decide to pay. Rijkenberg said this was a win-win situation for the government and the taxpayer. He said the government would be able to collect more tax, and the taxpayer would get some relief, which was needed particularly after the COVID-19 pandemic. He said if they came to companies with interest on taxes and penalties, some companies would have to shut down and at the end of the day, the taxman ended up getting nothing from that return on investment.

“We are trying to send a strong message that we are changing, we are trying to recover more taxes through the write-offs. Some taxpayers have put stuff under the table because they cannot afford to declare their true taxes,” he said.

The minister explained that the tax authority had to move from 2007 when the World Bank said in Eswatini, that it was a choice to pay tax or not. “It is where we come from. We must try and move your tax regime from there, to what we call a voluntary tax compliant country, which means you are paying your taxes because it’s what you do, you pay them out of your diligence,” Rijkenberg said. He said to move from there was a tough road, which came with the tax authority being very strict and having very heavy penalties, just to teach everyone that the taxman was to be feared. “From there you need to evolve into separating your taxpayers, the good, the bad and the ugly,” he said.

He said some taxpayers paid taxes on time or tried to do so, and they needed to be taken good care of as they were now your clients. Rijkenberg said they were others trying to do the right thing but are making mistakes and those were the ones who were intentionally making mistakes to cheat taxes. He said they had changed from being a tax authority to being revenue services as they were trying to shift and have a relationship with taxpayers. He said this way, the clients were encouraged to come to the taxman if they were facing any problems.

“If you are open, we will work with you to try and make you more tax compliant. The fear has already been instilled as many businesses have been shut down, while others were sent to jail and now, they know the taxman is not here to play,” he said.

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