A PUNITIVE NATIONAL BUDGET

INDEED, this government is the last administration in line to deliver Vision 2022, and the Minister of Finance acknowledges this pertinent point in his national Budget Speech – and this is the one and only good point contained in it.

The big problem, which this government and its lacklustre budget fails to address is that there is no money and our cash-strapped government leading a stagnating economy needs to induce new economic activities that can increase the total amount of money trickling deep into the g-wallet.

However, the way things are going, it seems government is determined to whisk the armed forces into the promised First World while the rest of us pay the price up to the last cent in our pockets. Government with its 2019/20 budget is out to punish any individual that dares to earn punishing individuals who dare to earn a living in Eswatini.

The Minister rightfully calls out the fact that government has to make the deliberate choice to contract national spending in real terms and allow the private sector to thrive. This means government has to operate on a balanced budget and only spend money it has without indulging in unsustainable debts to pay for its expenditures. The speech places more focus on tightening the belt, preventing wastage or leakages of money at government level, without providing new economic initiatives or instruments to generate new sources of business activities that can increase as well diversify government revenue.

The government of Eswatini does not trust that a vibrant and diversified economy can generate enough government revenue without taxing people to the last ounce of oxygen they breathe. The only economic recovery strategy that government knows is tax upon more taxation.

The 2019/20 Budget Speech is a confirmation that we should forget hype about new ways of doing things in Eswatini: we are back to the same old tried and tested government programming that will guarantee us yet another fiscal crisis in 2024, that is, if the country makes it that far.

Income

Government is looking to the same old tax sources to fund the fiscus. It seeks to deliver Vision 2022 on the backs, shoulders, sweat and blood of individual income taxpayers. Individuals earning more than E250 000 per year will have to give up yet another three per cent of their incomes on top of the 33 per cent they already pay.

This is not even income for the rich or ultra-rich. Instead, this new tax policy will affect the already struggling and dwindling middle class by further chopping down salaries for those earning a minimum of E21 000 per month. On the other hand, government thinks that slashing corporate tax will be the saving grace for this failing economy. It is easy to see why, but only time will tell because time again the Eswatini economy has failed to attract foreign direct investment to establish a thriving private sector that can put a majority of the country’s population back to gainful employment.

Even if the cut in corporate tax does stimulate a few businesses here and there, who will have the disposable income or the money to buy the goods and services on offer? Not emaSwati! Our income is specially reserved for the g-wallet, not to spend on the economy. Individual tax contributes as much as 19 per cent to total government revenue while corporate tax contributes a measly 8 per cent. If government fails to grow new businesses, will government expect us to cover the cash hole yet again?

Government is determined to take from your pocket in all spheres of your daily route: the electricity people use will most likely incur a value added tax (VAT); the fuel we use to get to work if you have a car or the bus fare hikes you will incur once the E1.20 fuel tax is implemented; the VAT you already pay on all the other goods and services you consume on a daily basis; the Pay as You Earn tax on your individual income; and now the sin tax you will have to pay on tobacco and alcohol when you try to get a break from all of this drivel.

When will the individual/consumer in Eswatini get a break?Why are people being punished for government’s inability to run a balanced budget? To add salt to the wound, the fuel tax will not only affect the transport sector but the rest of the economy, particularly the agriculture sector. The agriculture sector depends on fuel to produce the food we eat.

Thanks to our government, we can expect to pay more to have food on our tables going forward.  Our government is so quick to emulate the South African economy when it comes to gouging emaSwati’s pockets, but turns a blind eye to the fact that our economy is only a speck of dust compared to the South African economy.

When have real incomes increased to match up with the cost of living in Eswatini? With all the money government collects, how does the consumer or taxpayer benefit?

It is an extremelydifficult thing for our government to come out ofits one-sided biased thinking that increasing tax brackets will increase tax revenue! News flash: it is possible to grow government revenue without taxing people to be bone! An increase in tax does not necessarily equate to an increase in government revenue!

At the rate we are going, government is running the risk of burning out its only money-making machine, which is people and their personal income!

Post your comment

Your name:

Your e-mail address:

Add your comments:

Please enter the code you see in the image:

Image:

Code: