2 181 register for tax relief, 15 days left
MANZINI - With 15 working days left before the lapse of the Tax Debt Relief programme by Eswatini Revenue Service (ERS), only 2 181 entities have registered to date.
The Tax Debt Relief programme allows taxpayers, with outstanding tax liabilities, to pay their principal debt or make payment arrangements to liquidate their principal debt and it was launched at the end of April 2022.
The programme will lapse on August 5, 2022, according to the ERS Director Communications, Vusi Dlamini. He said most of the entities that had registered their interest in the Tax Debt Relief programme, included individuals and companies; mainly small and medium enterprises (SMEs).
Dlamini said 90 per cent of the companies that had shown interest were SMEs. Given the limited time left for stakeholders to register their interest for the programme, Dlamini said: “We would like to encourage taxpayers to utilise this once in a lifetime deal, as it is critical that all those owing taxes make use of this chance, which we know for a fact is a rare one. The deadline is August 5, 2022, where the window will close for those who want to apply.”
Advantage
Initially, Dlamini said ERS had set a target to have at least 14 000 entities taking advantage of the programme.
It is worth noting that tax arrears in Eswatini increased by 29 per cent to E9.369 billion from E7.262 billion in 2020/21. This was attributed to the COVID-19 pandemic, coupled with other economic and social disturbances that weighed on current and future growth prospects.
This challenge, according to the Minister of Finance, Neal Rijkenberg, continued to threaten government’s ability to maintain its tax revenue mobilisation goals.
The minister said with the weaker than expected revenue collection, domestic taxes to gross domestic product (GDP) ratio declined by 0.3 percentage points in 2021/22 to reach 14.9 per cent.
In light of this, Dlamini said if all the 14 000 entities in their debt stock would register for the Tax Debt Relief Programme, the ERS would recoup about E6 billion of the principal debt.
This follows that government is set to write-off E3 billion in tax penalties and interests owed by businesses and parastatals in the country. This initiative allows taxpayers with outstanding tax liabilities to pay the principal debt or make a payment arrangement to liquidate the principal debt.
Rijkenberg informed this publication that there were a number of parastatals that would benefit from the initiative and businesses as well. He said they needed to approach the ERS and make a commitment to pay their outstanding taxes. After registering their intent and commitment with the ERS, Rijkenberg said the entities would have to exhibit good behaviour in terms of commitment to their undertaking to pay-off their debt.
“Government is writing off E3 billion in interest and penalties which are in the books of government,” Rijkenberg said.
The minister said this amount did not include the principal taxes, but was of the penalties and interest that were accumulated by business establishments due to their failure to remit on time.
He said government’s debt book reflected that E9 billion and a third of that, which was from interest and penalties would be written off in the next three months.
Arrangement
He said all what the companies and parastatals needed to do, was to make an arrangement to pay their principal tax debts, within a timeframe of six to 12 months.
Rijkenberg said under exceptional circumstances, the payment period could be extended, if the entities stuck to their arrangement. This, he said, was a massive way of ensuring that businesses were able to thrive and come out of their debt (penalties and interest) scot-free.
The minister said this initiative was also aimed at encouraging people to declare their taxes. He said those who had not declared their taxes but would do so in the next three months would get amnesty.
Rijkenberg said the ministry was aware that the prevailing economic conditions were making it even more difficult for most businesses, and all personnel expected to contribute to the fiscus through payment of taxes.
The minister said this was more complicated for those who were contending with debts with the ERS, particularly due to penalties and escalating interest.
Commitment
During the launch of the Tax Debt Relief Programme, the minister said he had made a commitment that the ERS would develop such an initiative meant to assist taxpayers who found themselves with debts that were very difficult to repay.
Rijkenberg said this programme would provide relief on interest and penalties having considered taxpayers’ different circumstances. He said the ministry empathises with taxpayers who have heavy debts, since they could not absolve any taxpayer from paying the principal tax debt.
The minister said this programme was available to all taxpayers with outstanding tax liabilities as of March 31, 2022. Rijkenberg also mentioned that any taxpayer who failed to meet these conditions would be disqualified from the programme and all outstanding taxes including all penalties and interest would become due and payable.
Rijkenberg was quoted by our Business Desk, saying that the increase in tax arrears was a concern for the ERS and government and the introduction of the Tax Debt Relief Programme was one of their efforts to contain the increase that has averaged 25.1 per cent per year.