PARLY STOPS 15% VAT ON ELECTRICITY

LOBAMBA – They are not a popular bunch, but this time around they have come through for the nation.

This is none other than Members of Parliament (MPs), who yesterday unanimously voted against the 15 per cent VAT on electricity tariffs.
As a result, the proposal has been removed for now from the 2018/19 Budget that was presented by the Finance Minister Martin Dlamini last Thursday.

This happened in the House of Assembly yesterday afternoon when acting Finance Committee Chairperson, who is also Lobamba Lomdzala MP Marwick Khumalo, presented a report yesterday.
This follows the rejection of the budget by MPs on Monday, where the minister was instructed to meet with the Finance Committee to revisit the provisions of his speech and return with a people-friendly one.
It would seem the minister and the committee had successful deliberations as they reached some compromise, especially on the hot potato of the electricity tax.

“The 15 per cent on electricity tariffs has been deferred pending a study to be undertaken by the ministry on a cost-benefit analysis. So, it has been removed for now,” said MP Khumalo.  In 2017, the budget was also initially rejected as the legislators also felt it was not for the people.  The MP said the minister and his team were convinced by the committee that at the moment, no one would entertain the electricity tax and therefore, a further study would be conducted and perhaps the ministry would at a later stage try to convince them.

“However, for now that tariff is removed,” said Khumalo.
Another victory for the MPs was them being able to reach a consensus with the minister on the budget allocation to Micro Projects.
It was agreed that the budget allocation would be increased to E180 million from the E100 million that had been previously given to the institution.
Although the MPs had initially demanded E250 million and then lowered it to E200 million, the meeting eventually settled on the E180 million.

The MPs further scored a small victory as it was agreed that the allocation for the Regional Development Fund (RDF) would be increased to E118 million, with each inkhundla to be allocated E2 million.
“It was agreed that since Tinkhundla centres were expected to increase to 59, then the money allocated should be equal to all,” said MP Khumalo.
It was not an all loss scenario for the finance minister, as the legislators also agreed to the increase of Value Added Tax (VAT) by one per cent to become 15 per cent, not only to be at par with the country’s major trading partner South Africa, but also not to collapse the Sekulula drive or initiative.

The MPs agreed with Khumalo that if the local tax was different to that of South Africa, then it would be tedious to declare goods at entry points and therefore, it should be left at the same percentage.
However, although Manzini North MP Jan Sithole agreed with the 15 per cent VAT, he said this should not apply to basic food baskets such as mealie meal, bread, beans and rice.
The MPs said they were not happy that there was no mention of the allocation of any funds to buy tractors to fix roads under the Ministry of Public Works and Transport.

Matsanjeni North MP Phila Buthelezi said it was a pity that Minister Lindiwe Dlamini and her Principal Secretary Makhosini Mndawe were not in the House, as he wanted to ‘praise’ them for failing to do their job.  He wondered why the Mbadlane-Manzini road was being constructed as he argued that there were literally two roads in one area that were being made.

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