MANZINI – Government has extended a E1.7 billion Tax Debt Relief Programme.
The relief, according to the Eswatini Revenue Service Commissioner General, Brightwell Nkambule, was approved by the Minister of Finance, Neal Rijkenberg, on Tuesday. Nkambule, in a press statement, said Rijkenberg approved that the ERS may provide relief to those businesses and individuals whose tax debt interest had escalated beyond the principal debt. The commissioner general said this process would result in write-off benefit estimated at E1.7 billion.
“In May 2022, the Minister of Finance launched the Debt Relief Programme to ease the damage that the COVID-19 pandemic had inflicted on the economy. With this programme, the ERS was authorised to waive interests and penalties, leaving only the principal component of the debt,” the statement said in part. Nkambule said taxpayers that missed the opportunity to enrol in the previous Debt Relief Programme continued to suffer under the heavy burden of debts. In light of this, he said Rijkenberg had approved the new programme that would further ease the pressure on tax debts. He said with this programme, the portion of interest that had accumulated beyond the principal, shall be written off.
Interest
This was further emphasised by Rijkenberg, who said: “It is a new measure that we have introduced. It is applying the in-duplum rule. That means that if you have a debt of E100 then the interest charges cannot be more than E100, regardless of time. Interest cannot exceed the principle debt.”
It is worth noting that last year, government cancelled E3 billion in tax penalties and interests owed by businesses and parastatals in the country. This initiative allowed taxpayers with outstanding tax liabilities to pay the principal debt or make a payment arrangement to liquidate the principal debt.
Subsequent to this, the ERS said it had a target of at least 14 000 entities to enrol in the programme and clear their tax debt with them. This resulted in parastatals and other private entities taking advantage of the opportunity and settling their bills. The companies and parastatals needed to make an arrangement to pay their principal tax debts between a period of six to 12 months. It was said, under exceptional circumstances, the payment period could be extended, if the entities stuck to their arrangement. The move by government was a massive way of ensuring that businesses were able to thrive and come out of their debt (penalties and interest) scot-free. This was after government’s debt book reflected that E9 billion was in tax debt and a third of that, was from interest and penalties. It was aimed at encouraging people to declare their taxes.