E1.7 Billion VAT Refunded By The Eswatini Revenue Service

By Phesheya Mkhonta

The Eswatini Revenue Services’ (ERS) Integrated Annual Report for the year ended 31 March 2022 has revealed that E1.7 billion in Value Added Tax (VAT) was refunded to taxpayers.

To put things into perspective a total of E12.45 billion was collected by the government agency in the financial year under review and the net revenue was E10.7 billion. The difference is the E1.7 billion in VAT refunded by the ERS to customers.

“Customer centricity and timely processing of refunds are important, as the ERS needs to ensure that businesses remain liquid for day-to-day operations. A total of E1. 622 billion was processed in refunds for 2021/22 of which 98% were for VAT. There was an increase in the average time it takes to pay a VAT refund from 25.5 days to 37.7 days. While the time taken to pay an Income tax refund increased from 40 days to 59 days due to unforeseeable challenges and measures to improve on these timelines are being implemented”

Worth mentioning is that VAT is the second largest contributor to tax revenue in the country. The total net VAT collected in the 2021/22 financial year was E3.1 billion. This falls short of Personal Income Tax (PIT) which contributed a total of E3.7 billion this financial year.

ERS in its Report notes that large taxpayers have the highest payments under VAT compared to SMEs and on average 70% of the payments come from large taxpayers. 41% of VAT payments are attributed to the wholesale and retail sectors, and 26% to the manufacturing sector.

The standard rate of VAT in Eswatini was increased to 15% effectively from August 2018 from 14% since its introduction in 2012. It is intended to tax all consumption of goods and services except those that are exempt or zero-rated.

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