After His Majesty Mswati III’s Speech from the Throne on Friday, the minister of finance will subsequently deliver the 2026/27 National Budget.
On the same occasion last year, the minister tabled a national budget of E32.61 billion.
Much has happened between then and now — events that have placed additional pressure on the country to dig deeper into its national purse in order to finance critical programmes and urgent national priorities.
As the budget speech draws closer, I found myself listening carefully to Finance In Focus on January 27 — the minister’s fortnightly online update on the ministry’s key activities.
What stood out most during that session was not just what the minister said, but the tone behind what he said. He projected a noticeably dispirited demeanour as he raised issues that were clearly weighing heavily on him.
The minister explained that officials were busy preparing the budget, emphasising that the task had once again proven extremely difficult because the resources available for allocation were simply inadequate. Against the backdrop of huge expectations from government departments and key sectors of the economy, the tone set ahead of the budget presentation suggested there would be little room for optimism.
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While the minister stressed that available resources would be allocated according to priorities, the message to stakeholders was unmistakable — this would be a tightly regulated budget with limited movement from last year.
VAT STATEMENT THAT CHANGED THE CONVERSATION
Then came the statement that forms the essence of this discussion.
The minister turned to taxation and lamented the near absence of Value Added Tax (VAT) as a meaningful contributor to the national revenue pool.
In his own words, he said VAT had “no macroeconomic effect or impact on the economy”, implying that what is collected is so minimal that it barely influences the national budget or the broader economy at all.
That statement, more than any other, demands collective national reflection.
The most troubling part of VAT’s weak contribution is not that Emaswati are refusing to pay it. On the contrary, they pay VAT daily and without exception.
VAT is a consumption tax charged the moment one buys a VAT-rated product or service — groceries, fuel, clothing, airtime or pays for a service. The consumer does not negotiate VAT, nor do they have the option to delay it. They simply pay it.
So, the question is: where does it go?
If VAT is being paid at the point of sale, yet barely registers in the national revenue safe, then the problem does not lie with the public.
It lies with the system that exists between the consumer and the State — more specifically, with those who collect VAT on behalf of government: the retail sector.
WHEN MONEY IS HELD HOSTAGE
This is where the real discomfort begins — not only for the minister responsible for assembling the budget, but for the public who suffer because these funds are effectively held hostage and thus play no part in the socio-economic development of the kingdom.
A national budget is not created from abstract resources. It is built from identifiable revenue streams — taxes, service fees, fines, levies, dividends and penalties — supplemented by external sources such as Southern African Customs Union receipts, donor funding and grants.
For years, SACU revenue has carried the economy, shaping the budget and cushioning domestic weaknesses. But this over-reliance has also allowed uncomfortable domestic questions to be postponed.
As the minister prepares to table the next budget, it is reasonable to ask: how much money is lost annually through VAT that has already been collected from consumers but never reaches government accounts?
At a time when the national purse is described as shallow, how much could this money ease pressure on health, education, infrastructure and social services?
Are we losing hundreds of millions — or blindly bleeding the economy into the billions?
WHO BENEFITS WHEN VAT DISAPPEARS?
This is not speculation for its own sake. It is a necessary question.
From where I sit, the loss of VAT revenue appears to occur through a combination of administrative weakness and deliberate non-compliance.
VAT systems rely heavily on honest declaration and effective enforcement. Where monitoring is weak or capacity is stretched, opportunities for abuse are bound to be exploited.
Some businesses underdeclare sales. Others inflate input costs. Some consistently declare losses year after year while continuing to trade visibly and profitably — precisely the concern raised by the minister.
In such cases, VAT collected from consumers becomes working capital for businesses rather than revenue for the State.
Who benefits from this arrangement? Certainly not the ordinary citizen.
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When VAT is collected from consumers and knowingly not passed on to government, it is no longer a matter of administrative delay — it is tax evasion.
The damage goes beyond missing revenue. It weakens the authority of responsible institutions such as Eswatini Revenue Service, compromises public trust and breaks the understanding between citizens who pay and a State meant to use those funds for the common good.
THE VAT DEBATE AND THE REAL ISSUE
There is also the question of money flowing out of the country. A significant portion of the retail sector is linked to regional or foreign ownership structures, where profits are repatriated and payments made across borders.
Economists argue that VAT should not be treated as a central pillar of GDP growth, warning that overreliance shifts pressure to consumers. That argument makes sense.
But it misses the real issue here.
The issue is not about raising VAT or squeezing consumers further. The issue is that VAT already paid is not reaching government to improve the lives of those who paid it.
This is not a policy debate. It is a question of accountability.
From the minister’s statements on January 27, there are indications that government intends to become stricter with retailers showing suspicious tax behaviour, particularly around VAT remittances.
This is clearly long overdue.
A COUNTRY ROBBING ITSELF
We have seen hospitals struggle, government suppliers go unpaid and roads deteriorate.
This is not because citizens are unwilling to contribute. It is because the system between contribution and delivery is leaking — intentionally so.
If a nation’s people pay their share, but the money never reaches the national purse; if resources exist but are trapped in private hands; if the burden is carried by the many while the benefit accrues to the few — then what else can this be described as?
As the 2026/27 budget is presented, this question deserves collective national reflection — not as a blame game, but as a demand for reform, discipline and fairness across all stakeholders.
If we do not commit to this kind of reform urgently and decisively, then in effect, we are a country robbing itself.
And that is an uncomfortable place to be.
Until next week,
God bless!
