Africa-Press – Eswatini. With these three simple yet powerful words, Minister of Finance Neal Rijkenberg has this morning told this publication that the Kingdom of Eswatini will suspend the planned Value-Added Tax (VAT) hike, following South Africa’s decision to reverse its own.
The minister’s brief but definitive response was prompted by South Africa’s surprise announcement today that it would maintain VAT at 15%, shelving the proposed increase to 15.5% set to begin on May 1, 2025.
Eswatini, which had just approved a 0.5% VAT increase in Parliament to align with its southern neighbor, has now pivoted in a move that reinforces the government’s responsiveness and commitment to economic stability.
According to South Africa’s official media statement, Finance Minister Enoch Godongwana will table the Rates and Monetary Amounts and Amendment of Revenue Laws Bill to maintain VAT at 15%, despite earlier budget pronouncements of a hike. The reversal comes after broad consultations with political leaders and parliamentary committees, which concluded that the increase could disproportionately affect lower-income households. The change is expected to leave a R75 billion gap in revenue, prompting revised expenditure proposals in Parliament.
Background: Eswatini’s Strategic Move — Now on Hold
Just a day ago, on April 23, 2025, Members of Parliament in Eswatini had passed the VAT (Rates) Regulations 2025, effectively increasing VAT from 15% to 15.5% starting May 1. The decision was framed as a strategic alignment with South Africa to maintain smooth trade flows, given the Lilangeni’s peg to the Rand. It was anticipated to bring in E185 million in additional revenue.
During the robust parliamentary debate, Lobamba Lomdzala MP Marwick Khumalo, who tabled the motion, emphasized the need for regional consistency, noting that other Rand-pegged countries like Namibia and Lesotho had considered similar adjustments. While the bill gained majority support, a few MPs raised concerns about the timing and its impact on the economically vulnerable.
A Responsive and Forward-Looking Government
The suspension of the VAT hike signals a government that listens. By aligning with South Africa’s reversal, Eswatini demonstrates its commitment not just to regional harmony, but to protecting the financial well-being of its people. With a swift policy adjustment, the Ministry of Finance has shown both agility and empathy in navigating the complexities of fiscal policy.
As the region adapts to shifting economic dynamics, Eswatini stands firm in its mission to pursue growth without placing undue burden on its citizens. The revised VAT position will now pave the way for reimagined fiscal strategies—ones that continue to reflect the country’s positive, people-first economic agenda.
“Blessings,” concluded Minister Rijkenberg in his message to this author—a fitting note of hope and assurance in changing times.
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