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GOVT COMPANIES OWE E1BN IN TAXES

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mfanukhona@times.co.sz


MBABANE – While government continues to apply for external loans, it has emerged that it is being owed approximately E1 billion in taxes.
Of a major concern, government is being owed by its own companies and institutions. There are 48 public enterprises.  Actually, these are companies under the partial and total ownership of government. In other entities, government has a direct financial interest.


However, Category A companies are 100 per cent owned by the government. It has been learnt that some of these public enterprises have not been remitting taxes such as pay as you earn (PAYE) and value added tax (VAT) to the Eswatini Revenue Authority (SRA).


These monies had not been remitted by November 21, 2019. This is contained in a report signed by the Chairman of the Ministry of Finance Portfolio Committee, Senator Tony Nkosikhona Sibandze and Sabelo Shabangu, the Committee’s Clerk.
The report quotes Minister of Finance Neal Rijkenberg as having disclosed to the Senator Sibandze-led committee and senators that the outstanding money owed to government included penalties and interest that was being charged or effected by the SRA.
Rijkenberg’s report does not name the parastatals that did not remit tax to government. It must be mentioned that Busangani Mkhaliphi, the Director of the Public Enterprise Unit (PEU), highlighted in her December 31, 2018 report that the University of Eswatini’s (UNESWA) current liabilities exceeding its current assets led to the institution’s inability to remit PAYE.
Dependance on govt


Again, it must be explicitly stated that the outstanding E1 billion is not only owed by UNESWA. However, sources close to the issue told the Times SUNDAY that parastatals that owed SRA big money were those whose sustainability depended entirely on government assistance.


The SRA, according to the impeccable sources, were unable to take them to court because they (public enterprises) did not have the money to remit to the authority.  UNESWA is one of those public entities depending on government’s subvention.
Rijkenberg mentioned that the Public Enterprise Unit has been monitoring the performances of the entities.


He disclosed that there was a continuous increase in the arrears, mostly being PAYE, by public enterprises. “The Unit collected stock of arrears and prepared consolidated reports for the months of June and July 2019,” the minister said.
Total revenue collected for the second quarter of the year as reported by Rijkenberg amounted to E3.82 billion while the year-to-date collection amounted to E8.46 billion. The minister of finance said revenues that showed a positive performance were income taxes, taxes on goods and services, and non-tax revenue.


On the other hand, the latest debt figures showed that, as at September 30, 2019, total public debt stood at E18.66 billion or 27 per cent of the Gross Domestic Product (GDP). That was composed of E11.46 billion of domestic debt and E7.21 billion of external debt.

E1bn loan for ICC
Had these entities remitted the PAYE and VAT to SRA, there would have been no need for government to request for a loan of E1 billion for the construction of the International Convention Centre (ICC) from the Export-Import Bank of the Republic of China (Taiwan).


The exact amount of money sought from the Export-Import Bank of the Republic of China (Taiwan) was US$ 83 018 441.26, is the equivalent to E1 162 258 177.64.
Vusi Dlamini, the Director Communications at SRA, could only say they would not be in a position to comment because the issue touched on taxpayers.


“Unfortunately this is one of the situations where as an organisation we cannot delve into taxpayers’ issues in public domain. The specific segment you are referring to are also our taxpayers and we have to respect the SRA’s policies on confidentiality of taxpayers’ information,” said Dlamini.


Setsabile Dlamini, the Communication Officer at the Ministry of Finance, said the ministry could not be specific on which parastatals owed tax as the matter was before the shareholder (government) for remedy.


A government economist said the failure by the public enterprises to remit tax to SRA destabilised the economy. He explained that government would not have secured internal and external loans if taxes were remitted on time.
He also pointed out that most of the enterprises that did not pay the taxes were mainly the not-for-profit organisations or those which were struggling to sustain themselves.

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