Having the right policies in place is what the Swaziland Revenue Authority (SRA) is lobbying for in ensuring maximum revenue collection that will translate to better economic growth.
SRA’s Manager for Research Edward Groening said part of their mandate as an entity is to support economic development through ensuring tax compliance, enhanced revenue collection and less reliance on the Southern African Customs Union (SACU).
Groening was making a presentation on behalf of the institution, themed ‘The Swaziland Revenue Authority’s Role in Sustaining Economic Growth in Swaziland’. He was one of the panellists at the Swaziland Economic Conference 2017 where he gave an overview of the institution’s operations.
He noted that as they continue to mobilise for revenue collection from taxpayers, they want to ensure that any tax policies in place and those being sought do not cripple businesses through compliance costs.
He said the SRA has made a number of recommendations regarding the policies that should be put in place to enhance their service delivery but the actual passing of the relevant legislations then becomes a challenge with the legislative arm of government.
Groening said another issue closely linked with policy has to do with tax incentives as means of luring investors into the country. “We give these tax incentives because we want more investments to flow into the country. However, this increases output tax yet the input remains the same,” he explained.
Groening noted the need to harmonise the challenges faced by the legislative side with their administration. As part of ensuring that they are on the same page with policymakers and lawmakers, he said a lot of lobbying to Members of Parliament, Cabinet Ministers and other decision makers is done.
One particular piece of legislation that SRA would want to amend is the Income Tax Order, which will also speak to alcohol and tobacco levy, among others. He noted that some of these pieces of legislation are quite outdated and not economically viable, a case in point being the continued payment of E18 graded tax for those in gainful employment.
“We should, as a country, also look into introducing new tax laws that will maximise our revenue collection. For instance, in some countries, they have excise on cellphones, taxes on the banking sector, among many others,” he said.
He mentioned that they want to encourage taxpayers to be compliant at all times and do this voluntarily while at the same time supporting the business community by reducing costs related to compliance in the payment of penalties.
As part of their success stories, Groening explained that the SRA has increased revenue collection by 10 percent over the years, which translates to about 14 percent of the gross domestic product (GDP) ratio.
“If this could be translated to capital expenditure, it should encourage positive economic growth,” he added.
With regards to over reliance on SACU, Groening noted that this is a serious challenge that the country has been facing for many years and SRA is making great strides towards eliminating this obstacle that many of the past governments have failed to eradicate.
He shared that Small and Medium Enterprises (SMEs), which form a large number of their taxpayers and the most costly to collect, contribute a small proportion to the revenue pool while the big companies who are few in number are the largest taxpayers.
In spite of some of the legislative and policy challenges that SRA may be faced with, the revenue authority has not given up hope in ensuring that all stakeholders come on board on tax related issues, for maximum revenue collection.