22 ministries, departments owe about
MANZINI – About 22 ministries and government departments owe pensions and taxes of about E150 million for the past financial year.
The ministries and departments are said to owe the aforesaid amount due to failing to remit Eswatini National 3rov ident )und (EN3) deductions, pension fund and value added tax (VAT to the Eswatini 5evenue Service (E5S .
The Auditor General (AG , Timothy Matsebula, in his Consolidated Gov ernment )inancial Statements (Annual Accounts of the .ingdom of Eswatini for the financial year ended March 31, 2022, listed the various ministries and departments as having failed to remit the said money.
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The actual figure for all the ministries and departments is E149 576 246.19. The highest outstanding amount was re corded with the Ministry of Information, Communications and Technology (ICT . The AG said the 3rincess Sikhanyiso led ministry had an outstanding VAT valued at E111 137 101.
Matsebula reported that he notified the controlling officer (principal secretary in the ministry that according to informa tion sourced from the E5S, the ministry had a significantly huge outstanding VAT balance. He said the debt period spanned from 2015 to 2022, which was over eight years. The AG said, however, he was unable to confirm disclosure of this amount in the financial statements and an explanation on how the debt was created, why it was not settled and reasons for its accumulation were not provided during the audit.
The AG said entities were required by law (Income Tax Order of 1975 as amended to remit taxes in accordance with the tax law. ³I raised my concern that reported liabilities balances could be misstated and therefore misleading to users of the financial statements. )urther, the ministry could be subMected to late payment interest, penalties and/ or lawsuits hence resulting in financial losses,´ reads the report.
Matsebula said he then advised the controlling officer to request for a budget to settle the VAT debt and effectively manage its debts in order to avoid their accumulation and to appropriately dis close the debt in the financial statements.
Matsebula said he further requested the controlling officer to provide an expla nation, which should be supported with documentary evidence, on how the debt was created, why it was not settled and the reasons for its accumulation.
³In response, the controlling officer stated that the VAT was accrued by dif ferent departments and parastatals, and the ministry had embarked on a tracing exercise to ascertain the implicated departments or parastatals,´ reads the report in part.
Response
)urthermore, he said the controlling officer’s response was noted, however, at the time of compiling the report, the matter had not been resolved. The AG further said there were unremitted de ductions of the national provident fund and taxes.
He said ³I reported that unremitted deductions in respect of the EN3) in creased from E3 507.85 in the 2020/2021 financial year to E9 367.85 in 2021/2022 and unremitted taxes remained un changed at E2 791 105.36 as at March 31, 2022. This shows that the matter as reported in my previous financial year’s audit report was not addressed.´ Also, he reported that the Umbutfo Eswatini 'e fence )orce (UE') had an outstanding VAT debt amounting to E10 850 476 as at March 31, 2022. The AG said VAT debts related to tax periods dating from 2016 to 2019, which were now a period over six years.
He said the effect of the outstanding VAT was that the country was deprived of receiving revenue in the form of taxes by the ministry. Matsebula said the con trolling officer was advised to remit the VAT debts to the E5S and provide proof of settlement and report monthly on the status of this tax debt to the Ministry of )inance and AG.
³However, during an exit meeting with the controlling officer, he explained that the tax was charged on donated items and as a ministry they were making consul tations with the Ministry of )inance and Eswatini 5evenue Services to establish whether the Ministry of 'efence could be exempted from paying tax on donated