PS: GOVT FACES E65M BLOW IF ELECTRICITY VAT SUSPENSION STANDS

MBABANE – Government had hoped to rake in a whopping E65 million through the implementation of value added tax (VAT) on electricity.

However, this dream has been shattered for now following a move by Members of Parliament (MPs) to temporarily halt government’s proposed 15 per cent VAT on electricity.

Currently, electricity does not attract any form of taxes.
News of the multimillion blow was confirmed by the Principal Secretary in the Ministry of Finance, Bheki Bhembe, in an interview yesterday.

Bhembe said if the MPs’ move to stop the VAT on electricity would be successful, government stood to be dealt a huge blow.
He said it would have to find alternative means to finance the E65 million it had budgeted for.

Budget

He said government would have to reconsider its budget and look at how the millions are generated.
“If the MPs’ position goes through, government’s revenue will be below by E65 million,” Bhembe said.
The PS shared that government revenue was not the only issue that stood to be affected as electricity generators would suffer the same fate.

He said the proposal was made to Parliament after consideration of the local generation capacity, which stands at 10 per cent.
He said with the current events, the country would continue to import the same amount of electricity.
Bhembe clarified that the policy change sought to promote domestic electricity generation.

He said this would have an impact on Swaziland’s electricity security.
Electricity is currently exempt from VAT.
The PS explained that this meant that electricity producers could not claim VAT on their inputs.

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