IT’S HIGH TIME WE ADDRESS TAX ISSUES - MP MARWICK
FOLLOWING the cluster of challenges faced by businesses, amongst which tax and regulatory frameworks were said to be the thorniest issues, Lobamba Lomdzala Member of Parliament Marwick Khumalo says its high time legislators address these challenges.
Khumalo was responding following the presentation of the company survey 2017 findings on Wednesday by the Central Bank of Swaziland (CBS) and the ministry of economic planning and development.
During the presentation of the findings, CBS Senior Economist, Balance of Payments Sipho Sikhosana said most companies cited regulatory, tax issues and utility costs as their main challenges.
Khumalo said they have been hammering on tax issues for years.
“Now, the survey has confirmed the concerns of the general populace of the country. The challenge comes back to us as legislators and show that there are some amendments that need to be done,” said Khumalo.
He further invited the presenters to engage with legislators to unpack the specific areas of concerns for businesses.
“The Swaziland Revenue Authority (SRA) also has to be mindful of the fact that there are serious concerns on taxes,” he said.
During his presentation, Sikhosana said the manufacturing sector, which is the most contributing sector to gross domestic product (GDP) took 24 per cent share of the challenges recorded in 2016.
The survey findings reflect that companies in the manufacturing sector were highly concerned with the high costs of utilities, especially the escalating electricity prices and the unreliable supply.
“Problems around taxes and border issues have, in 2016, been prevalent in the discussions as companies complained around issues related to late payments of refunds and a delay at the border that often times affect their turnaround time,” said the report.
Poor communications infrastructure was seen as a barrier to the growth of the manufacturing sector with slow internet connectivity reportedly being a great concern for businesses as paper work for border clearances is now submitted online.
The report states that about 43 per cent of the challenges reported regulatory frameworks were linked to the financial services sector.
“Non-banking financial institutions are said to pose unfair competition to the banking industry as they compete for the same pie but have a different set of regulations,” said the report.
Manufacturing companies reported being burdened with data requests by regulators.
On the other hand, the report said other sectors such as the wholesale and retail sector complained about the lack of regulation in the industry which also brings unfair competition.
On issues related with tax, the report stated that businesses felt that taxes have increased the cost of doing business.
As a consequence, the report said one company even had to reallocate one of its shops to South Africa as it has became very difficult and time consuming to export without having a sister company in SA.
The prevalent challenge recorded by the manufacturing and tourism sectors was high costs.
The report said accommodation establishments raised the issue of huge increases in other deposit charges following the scrapping of bank charges raising the cost of doing business in the country. “Costs are also exacerbated by the increasing number of regulatory authorities or institutions as they also impose levies from companies to finance their operations,” said the report.
Whereas, increases in interest rates during the past year were also said to have negatively affected the banking sector.
“It has affected the affordability of debt, particularly mortgage and it is evident by the sudden increase in the sale of houses as the mortgage becomes unaffordable,” said the report.
About 21 per cent of the challenges reported by companies, representing all sectors of the economy, were related to government inefficiencies.
Interestingly, about 28 per cent of these challenges were raised by marketing boards.
IT IS TIME: Lobamba Lomdzala MP Marwick Khumalo making a comment.