- Announces paying tax to start from E4000 earners
- corporate tax cut from 27.5%, PAYE increased from 33%
Mbabane – A proposed increased Pay as You Earn tax (PAYE) and reduced corporate tax by the Minister of Finance Neal Rijkenberg has raised eyebrows.
Delivering the 2022 budget speech at the August House, Rijkenberg said, “Government is introducing a capital gains tax for businesses that is aimed at closing loopholes that businesses are using to pay less tax. Government intends to lift the tax brackets leaving more cash in people’s pockets earning less than E250,000 per year. Individuals will now only start paying tax from E4,000 per month instead of E3,500 per month.
Unfortunately, we cannot afford to have this reduction other than lifting the upper limits of those earning more. The proposal is to lift the upper tax bracket from 33 percent to 36 percent. This would mean that 80 percent of the tax payers would be better off with more money in their pockets and 20 percent of higher income earners paid more than E300,000 per year would be worse off.”
He added, “Mr. Speaker, it is understood that this will negatively affect everyone and I appeal to all of us to put the interest of the poor above our own. This measure will be addressing our income inequality. Government is proposing amendments to the VAT legislation and reconsiders some non-vatable items that are not pro-poor and have standard rated VAT on electricity excluding domestic use.”
The legislator said they were introducing presumptive tax for SME’s to simplify their administrative processes and remove the requirement of audited financials for payment of tax.
“We are reducing corporate tax from 27.5 percent to 25 percent. This is in line with the rest of the world reducing tax rates and aims to assist companies to grow quicker and helps to solve our unemployment problem. To balance the loss in the reduction in corporate tax the bill also includes the review of the initial allowances, penalties on late submissions on PAYE, capping of losses carried forward, and the increase of the rate of withholding tax on interest for non-residents from 10 percent to 15 percent,” he said.
In addition, Rijkenberg said government intends to introduce a tax on worldwide income for the residents of the Kingdom of Eswatini. He said it is envisaged that these measures will make the poor better off.
Discussion about this post