Mbabane – Government will from today, Monday September 11 withhold the 15 percent Value Added Tax (VAT) from all invoices during the disbursement of payments to all its suppliers and remit same to the Eswatini Revenue Service (ERS) on behalf of the supplier.
Described as a simplified VAT mechanism, government will do this through the office of the Accountant General in the Treasury Department. Previously, suppliers received the 15 percent VAT and were expected to remit to the ERS.
In a joint statement by the Ministry of Finance Principal Secretary Sizakele Dlamini and the ERS Commissioner General Brightwell Nkambule advised that the new method of VAT payment was meant to enhance compliance and reduce administrative costs.
“This initiative is designed to protect Government contracted suppliers from incurring undue tax liabilities and interest while enhancing compliance with the country’s tax laws,” the statement read.
Government suppliers will continue to charge VAT at the standard rate of 15 percent and reflect this in the invoice to government as per expectation from any VAT registered supplier. The suppliers will still be expected to submit their VAT Return to ERS as per the defined regular intervals which are quarterly, monthly or annually.
The amount of VAT withheld by the government will then be credited to the VAT account of the Government Suppliers by the ERS to offset the liability that will be generated by the VAT Return.
The ERS is expected to hold s workshop for Government Suppliers this month where the new mechanism will be unpacked.
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