Africa-Press – Eswatini. The 15 per cent Value Added Tax (VAT) on electricity tariffs will be charged on commercial entities from the beginning of September.
This follows amendments into VAT Act of 2011 which comes into effect from September 1.
Eswatini Electricity Company (EEC) Corporate Affairs Manager Khaya Mavuso has confirmed that in line with the gazetted amendments, they would include 15 per cent on tariffs only for commercial clients. He clarified that domestic consumers would not be affected by the latest developments.
“We are working on systems that will enable these changes to be effected,” said Mavuso.
Eswatini Revenue Service (ERS) Director Communications Vusi Dlamini also confirmed that the changes would be effected as communicated by the EEC. He highlighted that this would be good for business who have been incurring the cost for a long period of time.
“If you are registered for VAT, you will now be able to claim it as input tax when you file taxes either monthly or quarterly,” Dlamini explained.
Business Eswatini (BE) Chief Executive Officer (CEO) E.Nathi Dlamini explained that this was a positive step because VAT on businesses could be claimed back or set off against items sold or bought which attracted VAT.
“The only snag is that one has to wait for one or three months to get to balance the books. It is unlike VAT on personal spending which is an outright expense and which cannot be claimed back,” said Dlamini.
The VAT Act requires that any business which supplies goods or services which were not exempt from VAT in Eswatini should apply for registration. VAT registration is compulsory for businesses whose annual taxable turnover exceeds E500 000.
ERS mentioned that any business with reasonable expectations to reach this amount should also apply to register.
National, regional or public institutions (parastatals and municipalities) which make taxable supplies were also required to register for VAT even though they do not meet the above mentioned threshold.
Exempt
Businesses supplying only exempt goods and services were not required to register. However, where a business supplies both exempt and taxable services, that business ought to register if the total turnover of the taxable supplies meets the annual turnover of E500 000.
Other businesses whose turnover was below the threshold of E500 000 may apply for registration if they meet the registration requirements and the CG was satisfied that they were fit and proper to be registered.
The VAT registration requirements include a fixed place of doing business in Eswatini, capacity to keep proper accounting records and capability to submit regular and reliable returns.
Businesses must apply for VAT registration by submission of a Tax Identity Number (TIN) registration form.
Once registered taxpayers expected to display registration certificate in a prominent place on the business premises as proof that the business was authorised to collect VAT. Businesses can only charge VAT on their taxable supplies with effect from their registration date.
Other obligations for VAT registered businesses include issuing tax invoices for all their supplies, maintaining and keeping accurate accounting records within the country together with updating registration information whenever the need arises.
ERS explained that a business registered for VAT may apply in writing for the cancellation of registration if that business has ceased making taxable supplies or no longer meets the registration threshold.
The Commissioner General (CG) Brightwell Nkambule may also cancel the registration of a business if it no longer has a proper and fixed place of business, does not keep proper accounting records, and does not submit regular and reliable tax returns or not in the opinion of the CG a fit and proper person to be registered.
It has been previously reported that during the 2020/21 financial year, ERS paid out VAT refunds valued at E1.560 billion.
The revenue service explained that in its quest to improve the paying taxes aspect of the ease of doing business index, it improved the average time it took to pay a VAT refund from 25.5 days to 20.1 days.
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