The government of Eswatini will no longer proceed with the proposed 0.5% increase in Value Added Tax (VAT), aligning with South Africa’s recent decision to halt a similar move.
This was revealed on Wednesday by the Minister of Finance, Neal Rijkenberg, during an address to the nation. The Minister confirmed that while the House of Assembly has already passed the VAT regulations, including the proposed increase, the government will now engage Senate to withdraw the 0.5% increment from the final version of the legislation.
“We’ve noticed that South Africa has made a decision not to go ahead with the 0.5% increase in VAT, and in Eswatini, we will follow suit and do our best to do likewise,” Rijkenberg said.
He noted that although the regulations were set to be tabled in Senate on Wednesday, they will now be subject to further deliberation, particularly on the matter of the VAT adjustment.
The Minister emphasized the importance of harmonizing tax policy with South Africa, given the deep economic integration between the two countries.
“If we put 0.5% and South Africa does not, it would have been chaos. The other way around would have been chaos, too. So, as a country, we no longer want to pursue the 0.5% VAT,” he said.
He further stated that following Senate’s consideration, any amendments will be taken back to the House of Assembly to formally correct the record and ensure the remaining aspects of the VAT regulations are passed without the proposed increase.