By Phiwa Sikhondze
While the Eswatini Revenue Service (ERS) has made significant strides in improving Value Added Tax (VAT) collection, it continues to face challenges in achieving full compliance.
This was revealed by Brightwell Nkambule, the Commissioner General of ERS, during the launch of the 2024 Tax Filing Season which was held at the Service’s boardroom.
“Otherwise, VAT continues to be a challenge, even though we’re doing slightly better, as you can see, there’s still a lot more we should be collecting on VAT. We are not yet where we would like to be,” he said.
Edward Groening, the Director of Strategy and Statistics at ERS, provided detailed insights into the VAT performance, highlighting that the ERS has reported a notable increase in VAT revenue, which has grown by approximately 9% compared to the previous year.
This growth positions VAT as the fastest-growing tax type for the ERS, with current collections exceeding targets by 2%. Despite these gains, the ERS acknowledges that there are still substantial gaps to address in achieving optimal compliance and revenue targets.
“Speaking to the voluntary compliance that the CG talked about, we also see an increase of about 2% to the rate of voluntary compliance on the VAT side, to about 70%. So, we are seeing improvements, but there’s been huge gaps that we are working on,” Groening said.
Nkambule further noted that the ERS has been focusing on automation to enhance compliance. “The new system captures transactions as they occur, reducing the temptation to misuse VAT funds. This approach has led to a notable increase in compliance, although some non-compliance issues.”
”The ERS is committed to further educating the public about the importance of tax compliance. Officials emphasized that taxes are a crucial source of funding for the government, supporting various public services and infrastructure projects. The ERS aims to make tax filing a routine practice, similar to how it is perceived in other countries,” he concluded.