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SENATORS URGE FINANCE MINISTRY TO REDUCE PAYE

04/07/2023 08:51:00 Nonduduzo Kunene

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LOBAMBA – Senators have urged the Ministry of Finance to consider reducing Pay-As-You-Earn (PAYE) as emaSwati are struggling to make ends meet.

The senators made this suggestion yesterday during the Clause by Clause session of the Income Tax Amendment Bill of 2022. The senators were responding to several clauses of the Bill that they were taken through which included Clause 37 which was adding Section 68 of the 1975 Tax Order which introduces the taxation of companies outside the country and a proposal to increase PAYE tax from a maximum of 33 per cent to 36 per cent for high income earners and reduction of corporate tax from 27.5 per cent to 25 per cent. The legislators were of the view that the proposal to increase personal taxes was a recipe of turning the people against the King and might fuel strife in the country. The senators challenged the Minister of Finance, Neal Rijkenberg, who was with Eswatini Revenue Service (ERS) Commissioner General Brightwell Nkambule and Legal Officer Henry Sukati.

ill-informed

The senators stated that the proposal to increase PAYE and reduce corporate tax was ill-informed. They wondered what informed government or whoever made that decision, given the fact that workers were already paying a lot of taxes through PAYE as well as Value Added Tax (VAT). Senate President Pastor Lindiwe Dlamini was of those who voiced out her displeasure. “So corporate tax is reduced by 2.5 per cent with an assumption that more companies will be coming in the country and create more jobs. The question is, has that reduction had a lot of investors coming in and by extension had there been a lot of jobs created to justify the proposal? Those are the questions we are asking ourselves as to what is the motive behind this. In terms of PAYE, the question is why the ministry decided to make citizens bleed, who are already struggling and giving preferential treatment to the employer who are the corporates. We should be looking out for all citizens, not a selected few,” she said.

Dlamini noted that PAYE was already at 33 per cent and asked the minister with his officials how come the idea of reducing PAYE never crossed their mind. “Why didn’t we think of reducing the PAYE by at least one per cent and accommodate all citizens? Why are we looking out for a certain group?” she said. The senator said she was well aware that the ministry had an obligation to look at ways of generating revenue but at the same time, they shouldn’t be setting the people against the King. She said whenever people were not happy about something, they blamed the head of State, not government. Senator Princess Ntfombiyenkhosi wanted to find out if there would be any link between the ‘credit for tax paid outside Eswatini’ and PAYE. “33 per cent PAYE is too much already, instead bring back graded tax,” she said.

Other Senators such as Princess Gcebile wondered what the motive behind increasing PAYE and relieving companies was. Worth noting is that the House of Assembly did not pass the proposal to increase the PAYE to 36 per cent. Senator Moi Moi Masilela, who was also irked by the proposal, alleged that there was someone who was ‘sly’ about the taxes. He said somebody lied and claimed that the reduction of corporate tax would invite more investors.

investors

He said that particular person did not have a list of investors lined-up who were waiting to invest. “We were told that investors were flocking to South Africa and we were tricked to consider the reduction of corporate tax. Stop playing us,” he said. The senators asked the ministry to at least consider reducing PAYE from 33 per cent to 30 per cent. Senator Sigombeni Dlamini mentioned that employees had not been getting salary increment for years and the prices of goods and services were alarming in stores. He stated that adding PAYE was also taking from the empty pockets of emaSwati. “The proposal is more like adding fuel to the fire, people are struggling, please think for emaSwati,” he said. Senator Ngalonkhulu Mabuza also supported the senators.

Senator Princess Ntfombiyenkhosi also suggested that the ministry should also consider exempting some products from VAT in stores. She said salaries were not providing people with a decent living anymore. “Consider exempting basic households’ products from VAT but include it to luxury products such as colognes, jewellery, perfumed soaps and processed foods,” she said. The senator said some countries used a similar method of exempting certain goods and imposing high taxes on luxury items. On the other hand, Senator Chief Zabeni Shiba stated that he had a feeling that the Ministry of Finance together with ERS should halt the repealing of the Graded Tax Act. There were a number of people who were unemployed but who could afford to pay graded tax. “Rather increase Graded Tax to E30,” he said. He said instead of reaping the Act, the ministry should consider innovative ways of collecting graded tax and increase it in order to increase tax collection instead of pounding the working class with high taxes.