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MBABANE – Come August 1, consumers will have to fork out more from their wallets as the country’s VAT has been hiked from 14 per cent to 15 per cent.

This Value Added Tax increase by one per cent was announced through a gazetted notice issued by the Minister of Finance, Martin Dlamini.


Yesterday, the notice was already trending on social media sites with emaSwati raising concerns that things were going to be tough.
Worth noting is that the issue of the hike became a controversial debate in the 10th Parliament that was dissolved on June 30, by His Majesty King Mswati III, as MPs strongly opposed it after it was included in the Finance Bill, 2018.
Information gathered was that after that the ministry was then forced to remove it from the Bill and treat it separately, which is how it ended up being effected through a notice.


This hike will see commodity prices surging to unexpected heights as this is normally the case when VAT is increased.
The minister first announced the hike when presenting his Budget Speech in March and this happened when neighbouring South Africa had also effected a one per cent hike from 14 to 15 per cent.

The former MPs rejected the budget and instructed the minister to meet with the Finance Committee to revisit the provisions and return with a people-friendly one.

During the Budget Speech, the minister had pointed out that the country’s VAT increase was heavily influenced by South Africa, although in the same vein, he alluded to the fact that this was one of several measures introduced to increase the country’s revenue and to ensure the country has diversified revenue sources.

However, after many debates, the legislators eventually agreed to the increase and acknowledged 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.
Although former Manzini North MP Jan Sithole agreed with the 15 per cent VAT, he said it should not apply to basic food baskets such as mealie meal, bread, beans and rice.

Efforts to get a comment from the minister were not successful as his phone rang unanswered at around 7pm yesterday.
However, the ministry’s Principal Secretary, Bheki Bhembe confirmed the increase.
In an interview with FSE & CC President, Andrew Le Roux, he said even though he was not aware that the hike had been effected, it was obvious that in  the cost of doing business any increase on taxation was always a concern.

“It will obviously have an impact on poorer consumers, especially in a country where there is high unemployment. However, it is important that this came at a time when the country was facing financial challenges. Although people regard VAT as regressive, it is actually the fairest form of taxation,” he said.

He explained that it was important to align the country with South Africa as their single business trading partner.
“I am glad that this is now being aligned. The fact that the minister mentioned it in his speech in March, it obviously means that we have gaps in our budget,” he emphasised.

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