… Applies to Government suppliers only
BY KWANELE TSABEDZE
MBABANE – Government suppliers will now have an easier job paying their Value Added Tax (VAT).
This follows the launch of a Simplified Value Added Tax Mechanisms for Government suppliers. The new system, which was announced in a statement by Principal Secretary in the Ministry of Finance, Sizakele Dlamini and Eswatini Revenue Services (ERS) General Commissioner Brightwell Nkambule, will come into effect on September 11.
The Simplified Value Added Tax System is designed to reduce administrative costs and make VAT compliance much more guaranteed.
“This initiative is designed to protect Government contracted suppliers from incurring undue tax liabilities and interest whilst enhancing compliance with the country’s tax laws,” reads the statement.
“The Government contracted suppliers will charge VAT at the Standard rate (currently 15 per cent) and reflect this in the invoice to government as per expectation from any VAT registered supplier. Treasury Department (Office of Accountant General shall withhold the 15% VAT from all invoices during disbursement of payments to all Government contracted suppliers and remit same to the ERS on behalf of the supplier,” further detailed the statement on the new system.
“The government suppliers will still be expected to submit their VAT Return to the ERS as per the defined regular intervals (quarterly, monthly, or annually). The amount of VAT withheld by the Government will be created in the VAT account of the government suppliers by the ERS to offset the liability that will be generated by the VAT return,” further detailed the statement.
To further capacitate Government suppliers on using the new system, the ERS has published a Practice Note on their website – Practice Note No. LEG – VAT/001/2023-Simplified VAT Mechanism for Government Suppliers System.
The ERS will also host a workshop for all businesses contracted by Government to train them on the new mechanism in a September date to be announced.
