Africa-Press – Eswatini. The Ministry of Finance has written off a tax debt of E113 million owed by the Eswatini Television Authority (ESTVA). That’s 565 000 – no fewer – of E200 notes tipped down the nearest drain; except no one sees the notes because it’s merely one set of figures in a financial record of the ESTVA, presumably confirmed by the Eswatini Revenue Service (ERS). And with a symbolic stroke of the pen the debt is gone. This is Pay As You Earn (PAYE) tax, the income tax deducted from the salaries of ESTVA employees, to be paid to the ERS the following month. The Times SUNDAY was appropriately cautious in not stating whether it believes the PAYE unpaid by the ESTVA is PAYE deducted and not paid over to the ERS; or is PAYE not deducted in the first place.
Deduction
I’ll have a 100 to 1 bet with anyone that it’s the former. PAYE is deductible from a salary beyond around E3 500 a month and everyone who receives a payslip will see the deduction on it, or the absence of it. And if it’s the latter and it carried on and on and on, with all those employees keeping their mouths shut, they ought to make way for more worthy employees. No, it’s definitely the former. The infamous red flag is waving like mad. How on earth can a parastatal get away with E113 million in unpaid PAYE? That has to be many months of deductions. The first question is – why has government made the decision to write it off? That may be obvious. When the mud hits the fan at a later time, rather than now, the new government will get some of the blame; best to clear out the skeletons in the cupboard now. Second question – how can the PAYE tax debt be allowed to climb up to this figure, month after month after month? The most serious implication is that the ESTVA has effectively been financing its operations out of that debt. “We won’t pay the PAYE this month; we’ll have an overseas trip instead.”
Purposes
That’s quite possible and repeated many times for other purposes, with no one taking them to task. In last week’s article I moaned about the absence of periodic internal checks on government’s financial, especially cash flow, activities; and now it’s the parastatals. Government should use independent professional firms of accountants to do the checks and report accordingly. On the other hand, it might be a case of ‘SS’ – subvention starvation. In the absence of knowledge of the facts, the writer is in no position to judge. But the fact remains that a subvention to a paratstatal is agreed and finalised in the national budget for the coming year. Parastatals cannot be allowed to spend more than what was agreed in their budgets. When asked by the Times SUNDAY that this tax write-off must have adversely affected government revenue – which is an obvious truism – our proudly reappointed minister of Finance produced a strange reply: “ERS is still on target to collect the budgeted E13 billion for the year.”
Perhaps that uncharacteristically misleading response was ‘taken out of context’ as politicians, the world over, like to say. But the private sector equivalent of that would be the chairperson of a public company explaining to the many shareholders that the company had achieved its projected profit for the year and had, therefore, very kindly, and sympathetically, waived an amount of E100 million owed by a major debtor that had chosen never to pay anything; a fair comparison? The shareholders would eat him alive; the chairperson, not the minister of Finance. The latter should have done what the new government needs to do – take stock of all the skeletons and lay the blame publicly on the previous government.
Control
Whoops, I guess it depends who was in that administration. I ask the much-respected minister – “Surely it’s financial control gone out of control?” To which he might reply, “Yes, the ESTVA’s finances were out of control; and please don’t call me Shirley.” Forgive the ‘Airplane’ steal, there; we need a bit of humour to keep us sane and happy. But seriously, the same financial control criticisms – even more so – apply to the UNESWA tax write-off of E1.36 billion; yes, billion. The ESTVA waiver is only one-twelfth of that. Perhaps government thought; oh, that’s peanuts; let’s just write it off. And who’s next? Excuse the repetition but we need independent professional auditors – the auditor general is busy enough already – to help stay on top of this careless and irresponsible resource control behaviour.
The new government needs to provide a convincing assurance to the general public that this rot will not be allowed to build up again. You know the general public? It’s made up of individuals and companies who definitely won’t be getting tax liabilities waived in a similar manner. Just think what all that tax wasted could have done for the health, education and other social services in the country. And mark my words, global communication systems are now so sophisticated that would-be investors and donors are very sensitive to resource wastages of the type that we are seeing in this tax waiver business.
Source: times
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