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LAST WORDS ON BUDGET

20/03/2019 00:31:00 By Thabiso Dlamini

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GOVERNMENT’S strategy to revive the economy is based on how much the taxman can sink deeper into our pockets. The way things are turning for anyone who dares to spend money in this economy; the Eswatini Revenue Authority (SRA) will end up moving into our living rooms.

We observe silently all around us as government wastes heaps and heaps of money, and always has the nerve to come back to the individual taxpayer to demand for more cash.

Just recently, news surfaced that about 550 police posts needed to be filled, the Ministry of Education and Training (MoET) is always willing to absorb more deadweight to babysit pupils in the country’s public schools, fuel in the amounts of E19 million keeps evaporating at the Central Transport Administration (CTA). And even though government issued a memo demanding government vehicles to be parked by 4.30pm at their respective ministries, there is still a lot of gallivanting in these vehicles after hours.

And worse of all, the country is still trying to crack the code on debunking ghost employees yet at the same time keeps tapping into reserves and loans to afford civil servants’ salaries. As a taxpayer in Eswatini, we are always on standby, ready to dole out more cash to pay for even more deadweight and a whole lot of good-for-nothing government investments.

Now, our minister of Finance, who is in charge of how much money ends up in our pockets, highlighted that the budget for 2019 seeks to guarantee that our hard-earned taxes and international partners’ financial support is spent in a sustainable and transparent manner for the betterment of our economy and future generations.

I think so far all, taxpayers see is a future riddled with broke emaSwati and more looting to pay for bogus development programmes. When people question whether government cares about the individual taxpayer, the reflex response from government is more blame pushing to the individual taxpayer, listing even more reasons why the individual taxpayer deserves to be taxed. Imagine that!

One of the reasons that keeps surfacing and gaining momentum to much confusion of more than half of Cabinet and our Members of Parliament (MPs) is the issue of the shadow economy. The minister of Finance rightfully points out that a lot of money, about 37 per cent of Eswatini’s gross domestic product (GDP), circulates in the informal economy, escaping the reach of our taxman, SRA. That is an estimated E23.3 billion that SRA does not get to tax. Be that as it may, the question is what about those who diligently pay their taxes and contribute to the G-wallet without fail? When will these individual taxpayers get their tax break?
Instead of tackling informal trading directly, government decided to add a list of more types of taxes to ensure that whoever gets hold of money and exchanges it for any goods or services in this economy, that money will at some point be liable to some form of tax. It is important to understand this. The reason is that informal traders do too buy goods and services from the formal economy, which is liable to taxation. For example, a hawker who sells his/her goods to you and me away from the eyes of the taxman also has to buy water, electricity units, food from the local formal shops, etc, and pay tax on the consumption of these goods and services from the formal economy. By adding more taxes such as value added tax (VAT) on goods like electricity currently exempt from tax, the minister of Finance is making sure that everyone does incur some form of direct tax on the money in their pockets whether earned from the formal economy or not.
We are all aware that heavy taxation on business and general trade is killing the economy and has led to a lot of businesses closing shop while others turned to the shadow economy to sustain their lives. The shadow economy will always be there and government should look into it as a source of increasing/widening the tax base rather than using it as a justification to widen the types of taxes to tax everyone (including current taxpayers) through the roof. Those people operating in the informal economy are a great source of formal business growth that can be stepped up from the informal into the formal economy. This can only happen if, and only if, government would go out of its way to create a conducive business environment that would encourage the growth of the private sector than killing every entrepreneur who tries to establish an honest business.
Overall, there are lot of holes that can be punched in the national budget. Some of these new policies, especially the new tax policies, are short-cuts to get quick financial gains that will later turn to economic landmines in the near future. A good government has to balance economic equations on all ends, and stop making individual taxpayers scapegoats.