BY MBONGENI NDLELA
MBABANE – The Eswatini Electricity Company (EEC) recently revealed how much it contributed to the nation’s operational budget. This was revealed through the EEC Shared Value Report for the year ended 31 March 2021. The nearly E100 million contribution to the national budget is in the form of taxation as well dividends to the government.
This is in spite of the fact that EEC has frozen tariff hikes since 2019. Here’s what EEC said on the report:
Tariff freeze
The EEC has not increased electricity tariffs over the past two consecutive years. The last tariff increase was in the financial year ended March 2019. The tariff freeze was a timely intervention introduced at the start of the Covid-19 pandemic mainly to enable the domestic, companies, and government to better cope with the health crisis. The adverse impact of the 2-years tariff freeze is already showing on the company’s financial performance. However, of significant note is that the tariff freeze happened against very huge increases on import tariffs, especially from Eskom (15.37% in 2020 and 9.27% in 2021) that the EEC had to absorb and not pass through to customers. The economic pressure in the past 2 years has been significant, yet EEC continued to play an integral part in rendering support to people and the country’s economy by freezing electricity tariffs.
Taxation
As a good corporate citizen, the EEC contributes its fair share to the fiscus through the payment of taxes. The Company’s contribution to the public purse is largely through the Corporate Income Tax. For the year ended 31 March 2021, the company paid a total of E80 million to the Eswatini Revenue Service in respect of corporate income tax (2020: E285 million). The company also pays other direct taxes in the form of VAT, import duties, excise duties, withholding tax where applicable, etc.
Dividend to Government
EEC declared and paid a dividend to Government as the sole shareholder amounting E19 million in respect of profits for the year ended 31 March 2021 (2020: E22 million). The dividend payment is guided by the Dividend Policy on Public Enterprises for the Kingdom of Eswatini.
