Mbabane: It looks like the SRA started counting its losses from the last financial year (2018/19) where it collected 9.0 percent less revenue against the set target.
Dumisani Erasmus Masilela, in his statement contained in the taxman’s 2018/19 annual report stated that they ended the year at E8,995,706,402 (US$562,321,650.12) against a revenue collection target of E9,878,684,868 (US$617,417,804.25).
Masilela said this was a shortfall of E882,978,466, about E883 million (US$55,186,154.12) and for the first time since inception their collection was 9.0 percent below set target, compared to a surplus of E113 million in 2017/18.
According to Masilela, year on year revenue growth was only marginal for the 2018/19 financial year at 6.0 percent, amounting to E542,222,398. “We continue to forge strong strategic towards developing strategic partnerships towards developing our capacity in generating revenue and this will serve us well in the medium term,” Masilela said.
Under direct taxes, the tax collector collected E5,213 billion (individual tax, company tax, other income tax and Graded Tax). Of the said total amount collected, E3,261 billion came from individual tax payers which was 7,1 percent higher than the previous year but 0,9 percent shot from set target. Company tax amounted to E1,458 billion which was 6,1 percent higher compared to the previous financial year but 10,9 percent less than set target. Other income tax added up to E0,493 billion which was 12,0 percent higher than the previous year and 10,5 percent higher than target. Graded totaled to E0,001 billion which was 71,5 percent higher than what was collected in the previous year but fall shot 83,7 percent from the set target.
Indirect taxes (VAT, Fuel Tax and Road Tolls) amounted to E3,757 billion which was 5,4 percent higher that prior year but 14,6 percent shot from target. Fuel taxes collected added up to E1,050 billion and was 37.5 percent higher than the prior financial year but 4,4 percent below target. Road toll collected stood at E0,033 billion which was 4.8 percent higher than previous year but 84.3 against target.
Revenue collection continued on an upward growth trend of 6.0 percent in the period under review, although growing at the slowest pace since 2012/13, bringing down the average growth rate of the past five years to 11 percent. According to the report, this rate of growth in collection is higher than the growth of nominal GDP of 5.4 percent as projected by the Central Bank of Eswatini and the Ministry of Economic Planning and Development.
Growth in revenue was driven by increases in the collection from the manufacturing, wholesale and retail, construction and professional services sectors. “Declining revenue from the agricultural and ICT sectors had a counter effect on this growth,” reads the report.
For the period under review, government implemented two policy changes out of eight proposed for domestic tax enhancement at budget stage. The two policy changes that were implemented were the increase in VAT from 14 percent to 15 percent and introduction of motor vehicle levy for cars bought outside the Southern African Customs Union (SACU), which jointly yielded E110,652,113.
Government Gazette Extraordinary No.26, March 1, 2018 gave the SRA a mandate to collect revenue trough a levy that is imposed on all vehicles from outside SACU region. This is pitched at 3.0 percent at vehicles between 6-10 years and at 6.0 percent on cars older than 10 years. This policy move resulted in additional revenue collection of E5.365 million from August 2018-March 2019. There were 1 650 vehicles imported into the country which were between 6- 10 years and they generated E666,552 at a levy of 3.0 percent. Vehicles above 10 years brought into the country during the period under review totaled to 6 823 and produced E4,702,113 at a levy of 6.0 percent.
“The increase in VAT rate has helped counter the decline in benefits from the refund agreement with the South Africa Revenue Service (SARS) from 12 percent of revenue in 2015/16 when the agreement commenced implementation to 6.0 percent in 2018/19,” says the annual report.
These policies became effective in August 2018 much later that the anticipated date of April 2018 timeline.
Meanwhile, at the beginning of June, the SRA painted a gloomy picture of its revenue collection as a result of the coronavirus’ economic impact.
Director of Corporate Communications Vusi Norman Dlamini told Independent News that the lockdown resulted in missing the April target by 19 percent.
Dlamini went on to disclose: “And it is eight percent lower than the revenue collected in the same period last year.”