The Eswatini Revenue Authority (SRA) is already counting its losses as a result of the coronavirus’ economic impact as the lockdown had resulted in missing the April target by 19 percent.
These figures were provided by Vusi Norman Dlamini, SRA Director of Corporate Communications through emailed responses to a questionnaire sent to him by Independent News.
Dlamini went on to disclose: “And it is eight percent lower than the revenue collected in the same period last year.”
However, Dlamini could not give the monthly target for April, but in December 2019, Minister of Finance Neal Rijkenberg was quoted by Eswatini Observer saying Eswatini Revenue Authority targets vary, but do not exceed E800 million. If this information is anything to go by, it is highly likely that the SRA under collected by E152 million and only managed to collect E648 million.
For last financial year, government’s target was about E9 billion. The director added that while April is the first month of their financial year, indications were that there would be a significant slowdown in collections and that the downward spiral in various sectors was set to continue as the coronavirus continues to ravage the already ailing economy of the Kingdom of Eswatini. Dlamini conceded that as the under-collection trend is forecasted to continue as the deadly coronavirus persists, it would be a mission impossible for the SRA to meet the target, adding that they might collect revenue that might be less than what they collected in the last financial year.
An analyst from one of the financial institutions who preferred to comment on condition of anonymity because he is not mandated to talk to the media said on Wednesday: “While the Eswatini Revenue Authority has already been counting its losses as a result of the coronavirus’ economic impact, impending joblessness and business closures would hammer revenues even harder.
The analyst further pointed to the fact that the combined impact of Eswatini’s struggling economy and the lockdown could mean a loss of up to E3 billion in tax revenues this year.
Government, through the Ministry of Finance set an annual revenue collection target of E11.403 billion for 2020/2021.
For over the years, the SRA continued to achieve its core mandate of collecting revenue according to the expectations of government. For the 2017/18 financial year, the authority collected E8.453 billion against a target of E 8.340 billion, an improvement of 8.3 percent from the previous financial year collections of E7.803 billion.
When delivering his budget speech in February, Minister Rijkenberg said: “On the revenue mobilization, the expectation is that growth in our domestic revenue base shall continue. Ongoing strategies for improvements in the collection of value added tax (VAT), company tax, fuel tax and personal income tax will reduce some of the revenue collection challenges we have faced in the past.”
He went on to say revenue forecasts for 2020/21 financial year are projected to be E21.2 billion, indicating an 18.4 percent increase from the E17.6 billion in 2019/20 financial year’s collection.
“A number of factors underpin the expected increase in collection, adding that in particular, SACU receipts are expected to be E8.34 billion which is a 32.5 percent increase from the E6.3 billion 2019/20 financial year amount,” he said.
Due to the COVID-19 pandemic, the Ministry of Economic Planning and Development has predicted that the country’s economic growth will fall by 1.9 percent, compared to the baseline projection of 2.8 percent in the year ending April 1, 2021.
Economic Planning and Development Communications Officer Nokuthula Simelane told Independent News that the relative optimistic scenario assumptions showed a mild prolonged period of outbreak of about 8 months with mild shut down anticipations due to labour supply disruptions. Simelane said an overall negative impact will be felt by all sectors, including the government and private sector. On the other hand, Simelane said pessimistic assumptions show a 12-month period of outbreak resulting in a -6.1 percent contraction for this calendar year from the baseline projection of 2.8 percent.
“The potential economic impact COVID-19 outbreak in the domestic economy will definitely be deeply felt due to the unpredictable rising cases of the coronavirus,” said Simelane in the analysis to assess the likely impact of the COVID-19 pandemic.
South Africa, on the other hand, has predicted that its GDP to contract by 2.5 percent in the year ending March 31, 2021, and will recover by 4.5 percent in 2021.
Had it not been the COVID-19 outbreak, Eswatini’s nominal GDP Per Capita was forecasted to be US$4,244.991 in Dec 2020 as reported by International Monetary Fund (IMF). It recorded an increase from the last reported number of US$4 176.746 in Dec 2019. Looking ahead the IMF saw Eswatini’s Nominal GDP Per Capita projection to stand at 4,782.512 USD in Dec 2024.