Swaziland government has relied heavily on revenue from the Southern African Customs Union (SACU). A number of studies, including two that were done by the International Monetary Fund (IMF) in 2007 and this year, have indicated that there is a lot of potential to improve the contribution of domestic taxes to the fiscus.
Effective January 1, the Swaziland Revenue Authority (SRA) was declared operational by Minister of Finance Majozi Sithole. The Authority took over the responsibility of revenue administration in the country from the two government departments of Customs and Excise and that of Taxes.
The Authority acts within the broad framework of government but outside of the civil service structures. The SRA was founded through the Revenue Authority Act No. 1 of 2008. Under the SRA, initially the administration of revenue in line with the Authority’s mandate will be managed across three technical functions, namely:
n Customs and Excise;
n Sales and Value Added Tax; and
n Income Tax
The concept of revenue collection agencies was initiated in South America in the mid-1980s and the first country to adopt this concept in Africa was Uganda in 1991. There are currently over 20 semi-autonomous revenue collection agencies in Africa.
The noted trend amongst countries that have utilised this concept is increased efficiencies in revenue collection thus making a positive contribution to the country’s fiscal climate. These efficiencies are delivered through better coordination of revenue collecting activities and better strategies to promote compliance.
It is in this spirit that the SRA intends to quickly migrate a function based organisation structure to effectively discharge the duties given it in the founding Act.
SRA’s Mission
The Authority has committed to delivering its Strategic Plan by the end of March 2011. The draft that is already in place states its mission as being; “To become a highly efficient and modern revenue collection agency enhancing national development and instilling transparency, ethical and professional values in our staff”.
The use of modern practices and information technology, supported by a highly trained and motivated team will be the key drivers towards attainment of this mission.
Mandate
The SRA’s mandate includes:
n Assessment and collection of all revenue on behalf of government;
n Administer and give effect to the laws or the specified provisions of the laws set out in the Schedule and account for all revenue to which those laws apply;
n Study the revenue laws and identify amendments which may be made to any revenue law for purposes of improving the administration of, and compliance with revenue laws;
n Promote compliance with the revenue laws;
n Take such measures as may be required to counteract tax or revenue fraud and other forms of tax or revenue evasion; and
n To ensure that all revenue collected is, as soon as reasonably practicable, credited to the Swaziland Government General Account.
Swaziland has over the past year experienced a number of challenges primarily due to the economic meltdown which has gripped the entire globe. These circumstances have forced a reality check on many economies worldwide, prompting a review of national socio economic strategies and policies.
As His Majesty King Mswati III correctly observed, that in the face of these challenges, “We can either wallow in a sense of despair and hope for a stroke of miracle to bail us out or we can change our attitude, think creatively, work harder, unite and make sacrifices to tackle these challenges head-on”.
The establishment of the SRA is a positive step by government in working towards turning the country’s economy around.
In its bid to meet the challenge set for it by His Majesty, the SRA will place great emphasis on:
n Adopting a customer focused approach towards providing a quality service to its clients, the taxpayer;
n Educating taxpayers and promoting a culture of voluntary compliance with tax laws;
n Investing in infrastructure, systems and personnel aimed at sustainably enhancing voluntary compliance.
n Strengthening its enforcement measures and;
n Harmonising its strategies and systems with those of trade promotion agencies for harmonisation of strategies and the realisation of effective synergies.
In an effort to strengthen its institutional and human capacity, the SRA subscribes to various international organisations that set the tone in matters of revenue administration, such as the World Customs Organisation (WCO) and the Africa Tax Administrator’s Forum (ATAF).
Alliances with established revenue agencies such as the South African Revenue Service (SARS), the Lesotho Revenue Authority (LRA) and the Zambia Revenue Authority (ZRA) have also been pursued to achieve this objective.
Locally, the Authority will partner with a number of strategic partners, especially towards educating taxpayers on local tax laws and procedures for compliance.
The Swaziland Revenue Authority commits to His Majesty the King and the Swazi nation to diligently work towards raising the standard of revenue collection by placing great emphasis on efficiency, modernisation and professionalism.
Statement by Prime Minister introducing His Majesty
It is my honour, today, to say a few words before inviting His Majesty to address this gathering.
The launch of the new Swaziland Revenue Authority comes at a significant moment in our history when the Fiscal Adjustment Roadmap embarks on the programme to restore fiscal stability in a fair, disciplined and well-focused manner.
As they say in athletics, there is no gain without pain. In this case, implementation of the Roadmap will mean sacrifices within all sectors of the economy. It is also giving rise to the very tightest control of future government spending, though ensuring that service delivery in key areas of our social services is not compromised.
The other side of the budgetary equation is government revenue, of which the main component has hitherto been our share of the Southern African Customs Union (SACU) pool. That share has fallen drastically, giving rise to an even greater need, than before, to maximise our other main sources of revenue – income and sales taxation as well as customs duties.
The concept of equitable revenue collection demands that all citizens and residents of Swaziland satisfy their respective tax and customs duty obligations.
The existing taxpayer culture, however, leaves much to be desired. There is, therefore, a need for the citizens and residents of Swaziland to be educated on issues of tax compliance. I urge the Swaziland Revenue Authority to ensure they engage fully with taxpayers to maximise compliance with the laws of the land.
Restoring fiscal stability, and providing resources for achieving the ambitious targets we have set ourselves in the National Development Strategy, necessitate a universal commitment to paying what is rightfully due to government by way of taxes and customs duties.
As we seek to achieve a comprehensive degree of tax compliance, the Swaziland Revenue Authority is the key player, both as protagonist and catalyst. Your Majesty, your government stands ready to support the staff and management of the Swaziland Revenue Authority in ensuring that they achieve their mandate.
Indeed, it is clear much progress has already been made during these early days of the Authority’s existence and we commend all who have participated. The presence of His Majesty Ingwenyama and Her Majesty Indlovukazi at today’s launch will surely be a great inspiration to all those who will be working in the Authority.
It is now my honour to invite His Majesty to address this gathering and the nation.
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