The Senate halted the 0.5 percent Value-Added Tax (VAT) increment on Thursday, after the Minister of Finance, Neal Rijkenberg, asked not to go ahead with it in order to align with his South African counterpart, Enoch Godongwana’s sudden turn.
“Good day, Maswati Lamahle. We have noticed that South Africa has made a decision not to go ahead with the 0.5 percent increase in the VAT.
In Eswatini we will follow suit and do our best to do likewise,” Rijkenberg said partly in a voice clip.
Godongwana issued a public statement that South Africa will instead maintain the VAT rate at 15 percent, stating that the government—the Government of National Unity (GNU)—followed careful considerations after intense consultation processes.
He, however, warned of tough times ahead, as revenue that stands to be collected would fall short of E75 billion over the medium term.
Minister Rijkenberg had tabled the VAT (Rates) Regulation of 2025, which would have effected VAT at 15.5 percent on May 1. The notice was okayed by the House of Assembly prior to the new developments on the South African side.
Rijkenberg said despite that the House of Assembly passed the regulations, increasing with the 0.5 percent, until the regulations have passed the Senate, they cannot be implemented.
“And so, even though we will be tabling the regulations at the Senate because there are other elements in the regulations that will need to pass,. We will be speaking to the Senate, which we have already been doing, and asking the Senate to withdraw the 0.5 per cent from the regulations, meaning that if it goes to the Senate, one cannot apply the 0.5 per cent VAT in Eswatini.
“As a country we no longer want to pursue the 0.5 percent VAT,” Rijkenberg said.
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