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SHOCKING TAX HIKES PROPOSED

07/03/2018 03:36:00 BY SIBONGILE SUKATI

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MBABANE – Were Swazis sold a dummy when they were promised the removal of the annual E18 Graded Tax?

Instead of the much anticipated repeal, the current government, through Finance Minister Martin Dlamini, has proposed an increase of about 10 times more than what ought to have been scrapped.
The shocking new Graded Tax proposal schedule was tabled by the minister in the House of Assembly on Monday.

It is one of the many proposed amendments which come with the Finance Bill, 2018.
What has been occurring was that an amount of E1.50 was deducted monthly from every employee and in total the amount would be E18 annually.
However, under the newly-proposed schedule, the Finance Ministry has suggested that a person whose income does not exceed E8 333 per month, the tax payable each month should be E20.85.
This brings the annual total to E250, which will be the rate of taxation payable at the end of every month.

This reflects an increase of about E232 from the E18 that is currently being paid annually.
Interviewed yesterday, the Principal Secretary in Ministry of Finance Bheki Bhembe, said although there were views to repeal the previous Graded Tax, further consultations were held which eventually brought up this new method.
The scrapping of the Graded Tax was first raised by former Finance Minister Majozi Sithole, who said collecting the E18 tax was expensive and tedious for government as it turned out to be more expensive than what they collected.
Meanwhile, Bhembe revealed yesterday that about E3 million was collected annually from the E18 graded tax.

It should be noted that this proposed new tax is not inclusive of the Pay As You Earn (PAYE), which is taxed from salaries.
Although the proposed amendment is not clear on what the unemployed will be taxed, Nkhaba MP Menzi Dlamini argued in the House of Assembly yesterday that according to his calculations, they would be taxed about E60 per year.
The removal of the Graded Tax had also been stated that it would instead be covered for by the Value Added Tax (VAT).

The amendment of the Graded Tax Act, further states that a person who has an income exceeding E8 333, but not exceeding E16 666 a month, would have to pay E31.25 per month.
“In the case of a natural person in receipt of income exceeding E16 666 a month, but not exceeding E25 000 a tax payable a month shall be E52.10,” reads the amendment.

The amount of Graded Tax to be paid by a person whose income does not exceed E100 000 per year shall be E250.20 per year, while those who draw an income exceeding E400 000 a year shall pay E1 250.40 (per year).
The proposed amendment states that every employer who pays or becomes liable to pay any amount of remuneration to any employee, shall deduct such amount by way of graded tax, an amount as determined by the schedules and shall pay the amount so deducted to the commissioner general.

“The burden of proof that any amount of Graded Tax has been deducted by his employer shall be upon the employee, and any employees’ Graded Tax certificate shall be prima facie evidence that the amount of Graded Tax reflected therein has been deducted by the employer,” reads the proposed amendment.