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Graded tax from employees’
Business Section
By FAITH SHONGWE - SWAZI TIMES-03-Jun-2010
MBABANE – As from next month, employees will have their graded tax deducted once-off by their employer.
Graded tax on income derived from employment falls due every month and it stands at E1.50 for each employee.
At the end of July, employers will make a single deduction of E18 (E1.50 for 12 months) for each and every employee in respect of graded tax for the year of assessment, instead of making monthly deductions of E1.50 for each employee every month.
The employees will then remit the graded tax deductions with the Department of Income Tax together with employees’ Pay-As-You-Earn (PAYE) for the month of July.
Once employers deduct the E18 in respect of graded tax for the year, there will not be any more deductions in respect of graded tax for the duration of the tax year. The next deduction will only be made in July the following year. According to the acting Commissioner of Taxes Maxwell Lukhele, the new method of collecting graded tax was introduced as a technique of collecting graded tax effectively.
"Employers have the responsibility of deducting graded tax from each and every employer every month and remit it with employees’ PAYE. Each and every month, employers were required to deduct E1.50 in respect of graded tax from all employees and remit it with employees’ Pay-As-You-Earn (PAYE) for the month and this was viewed as inefficient to employers who had most of their employees falling below the tax threshold because it was expensive for them. Therefore, government looked for an effective way of collecting graded tax and we came up with the idea of employers making one deduction from each and every employee in respect for the tax year," Lukhele explained.
Deduct
He added; "Once employers deduct the E18 from each employer for the tax year, employers will not see any deductions in respect of graded tax until such a time when the new tax year falls due."
According to a notice issued by the Department of Income Tax, after deducting the graded tax for the year, employers will be required to submit it to the Commissioner of Taxes within seven days after July.
"Notice is hereby given that with effect from July 1, 2010 and each succeeding year of assessment thereafter, graded tax shall be paid to the Commissioner of Taxes as follows. In case of an employee in continuous employment with a single employer, the total amount of graded tax payable on income derived from employment in respect of any year of assessment shall be deducted once by the employers in July and paid to the Commissioner of Taxes within seven days after the end of July," reads the statement in part.
For an employee who commences employment during the year of assessment, the statement says: "The total amount of graded tax payable on income derived from employment shall be deducted once by the employer in the month in which the employee commences employment and paid to the Commissioner of Taxes within seven days after the end of the month during which the amount was also deducted."
On other forms of graded tax other than that derived from income, the statement says; "Graded tax payable, other than on income derived from employment shall be paid to the Commissioner of Taxes. In case of a person leaving Swaziland, it shall be paid by the person before departure from Swaziland. In case of a person who dies during the tax year, it shall be paid by his estate as a debt due at the date of death. In any other case, it shall be paid by the taxpayer at the end of each year of assessment, June 30," reads the statement in part.
Taxpayers must update taxes by month end
MBABANE –All taxpayers are required to ensure that they comply with the statutory tax obligations by updating all their taxes by the end of the month.
According to a statement issued by acting Commissioner of Taxes Maxwell Lukhele, a taxpayer will be committing a crime if they fail or neglect to furnish, file or submit any tax return or document.
He said the penalties range from a fine on conviction of E10 000 to E50 000 or imprisonment not exceeding five year or even both.
"Notice is hereby given that commencing on July 1, 2010 all taxpayers who were required to file returns of income for the 2009 year of assessment and the previous four years of assessment, effect any withholding tax, pay provisional tax, effect the withholding of employees’ tax (PAYE) and pay tax liabilities arising from assessment shall be subject to a comprehensive tax inspection to verify whether the above statutory obligations have been complied with," reads the statement in part. It says the Enforcement Collection Task Force will carry out the inspection.
"Taxpayers are hereby directed to ensure that they comply with their statutory obligations and bring all their tax matters up to date on or before June 30, 2010," reads the statement in part.
It says the taxpayers will be required to make available notices of assessments for the last five years of assessment, receipts of provisional tax payment, receipts for tax paid, receipts for PAYE remittances where applicable and receipts for payment of all other withholding taxes where applicable.
It also says taxpayers who want to pay in instalments can make a written application to the Commissioner on or before June 30, 2010.
"Where the tax is permitted to be paid in instalments and there is default in payment, the whole balance of the tax outstanding shall become due and payable," reads the statement in part.
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