By Ntombi Mhlongo
The Government of Eswatini has kept its promise to relieve citizens from having to fork out money for Graded Tax.
On Wednesday, Minister of Finance Neal Rijkenberg tabled a Bill whose object is to repeal the Graded Tax of 1968. Graded tax is an annual levy payable by adults in Eswatini. Unemployed male adults (18 years and over) are expected to pay E4.50 per annum whilst unemployed females are not required to pay anything.
There are two rates: E18 per annum for all adults in receipt of income, and this is payable via the first pay-as-you-earn (PAYE) remittance system, and E4.20 per annum for an adult male person not in receipt of income.
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It is expected that the bill will be debated, adopted, and passed by Parliament after which it will be the end of the story for the graded tax. During the 2023 Post-Budget Seminar organised by the Central Bank of Eswatini (CBE) at Sibane Hotel early this year, the minister did give a hint that Cabinet was set to approve a request to have the graded tax scrapped.
He was responding to a question on what the government is doing to ensure that EmaSwati who pay taxes are happy when doing so. During an Editors Forum Breakfast Meeting held in 2019 at the Royal Villas, the then Eswatini Revenue Services (ERS) Commissioner General Dumisani Masilela was asked to shed light on whether the continued collection of graded tax still made financial sense.
At the time, the argument was that this tax contributes an insignificant amount of money to the country’s overall revenue collected by the ERS.
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At the breakfast meeting, Masilela advised that it would have been a wise decision that graded tax be scrapped in the E21.83 billion 2019/20 budget presented by Minister of Finance Neal Rijkenberg in Parliament on February 27, 2019.
Masilela said the cancellation of graded tax collection would be an ideal move due to the fact that efficient graded tax collection requires more resources than what it actually contributes to the tax pool.
He asserted that between 80 to 90 per cent of the traffic which visits ERS service centres countrywide pertains to graded tax which effectively means more resources get allocated to graded tax collection instead of focusing on making tax collection more efficient across the board.
