IT’S HIGH TIME WE AD­DRESS TAX IS­SUES - MP MARWICK

Swazi Observer - - BUSINESS - Sto­ries by Man­qoba Makhubu

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.

Un­pack

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.

Un­fair com­pe­ti­tion

“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.

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