GOVERNMENT suppliers have called for urgent government intervention over the freezing of their bank accounts by the Eswatini Revenue Service (ERS) due to outstanding tax obligations.
The suppliers, who have formed the Eswatini Suppliers Association (ESA), say they are being unfairly affected because many of them have not received payments from government on time. They argue that delayed government payments have made it difficult for businesses to meet their tax obligations.
The association wants government and the ERS to stop freezing accounts without first engaging affected suppliers and considering the money owed to them by government.
Interim Secretary General of the newly formed association, Mduduzi Simelane, raised the concerns during an update on the association at the Eswatini Observer offices. He was accompanied by Interim Chairman Boyson Mamba, Vice Chairman Johannes Manikela and committee member Philani Tsela.
Simelane said the association wants a meeting involving government, the ERS, the finance portfolio committee and other relevant stakeholders. He said the meeting should allow all parties to engage in good faith and find a solution to the challenges faced by government suppliers.
“Freezing our accounts when we have been encountering delays in our payments by government is totally wrong when ERS works directly with government in the tax collection issue. This is killing small businesses as it also affects the payment of employees’ dues because of the delays and freezing of accounts,” said Simelane.
He said the freezing of accounts had placed businesses under severe financial pressure, particularly small and medium-sized enterprises that depend on regular cashflow to operate.
According to Simelane, suppliers are expected to meet their tax obligations and provide monthly records, while government payments can take a long time. He said suppliers are also faced with penalties when their tax payments are delayed.
“The freeze of accounts was traumatic to us. Businesses are affected because ERS wants monthly records and tax, while it takes time for government to make payments and charges daily penalties for further delays,” he said.
Simelane said some businesses had also experienced the freezing of personal accounts.
“Government is killing the businesses as this has gone further to ERS freezing our accounts without our knowledge or notification. We are not fighting with anyone, but we want things done accordingly. We do not get payments on time,” he said.
The suppliers say delayed government payments have become a serious challenge for businesses that provide goods and services to the State. They said the delays make it difficult for them to pay workers, settle debts, purchase stock and meet other operating costs.
In a formal representation issued by the association, the ESA said its concerns were raised in the spirit of constructive engagement and in the national interest.
The association said it is a legally registered entity incorporated under the Companies Act of 2009. It represents micro, small, medium and large businesses that supply goods and services to both the public and private sectors.
The association said the country’s economic challenges, including government liquidity constraints had resulted in suppliers waiting for payments for several months and in some cases, years.
According to the association, suppliers have had to use personal assets, mortgage family homes and rely on commercial credit to keep their businesses operating while waiting for government payments.
The association described the situation as a contradiction because, in its view, delayed government payments contribute to suppliers’ cashflow problems, while tax enforcement measures can further restrict their ability to operate.
It said freezing business bank accounts affects companies’ ability to pay salaries, purchase goods, service debts and continue providing services.
The association also raised concerns about personal accounts being affected, saying this could place additional pressure on business owners and their families.
The suppliers are therefore calling for government, Parliament, ERS and other stakeholders to engage on possible solutions instead of allowing the situation to continue.
They want authorities to consider the impact of government payment delays when dealing with suppliers who have outstanding tax obligations.
The association said its objective is not to avoid paying taxes but to seek a fair and practical solution that allows businesses to remain operational while meeting their obligations.
The suppliers are calling for an urgent meeting with the relevant authorities to discuss the matter and find ways of protecting businesses, jobs and the wider economy.
They maintain that government suppliers play an important role in keeping public services running and that their businesses need a stable cashflow to continue operating.
The association has urged all parties to work together to address the problem and ensure that tax collection and government payments are handled in a way that considers the circumstances of affected businesses.
125 suppliers leave FESBC to form new association
ABOUT 125 government suppliers have left the Federation of Eswatini Business Community (FESBC) to form their own body, the Eswatini Suppliers Association (ESA).
The move comes as government suppliers seek a stronger and more united voice to address challenges they face when doing business with government.
Interim Chairperson of the association, Boyson Mamba, said the main reason for forming the association was to allow government suppliers to directly deal with issues affecting them.
“We have been with FESBC for the longest time and our issues as government suppliers were not well presented. We were not registered, but we called ourselves suppliers. We now want to directly deal with the issues affecting us as people on the ground. We understand our issues and we know all the issues,” said Mamba.
Mamba said the association was now fully established and suppliers wanted a platform where they could meet, discuss their challenges and speak with one voice.
He said the association would give government suppliers an opportunity to engage directly with relevant authorities on matters affecting their businesses.
The formation of the association comes at a time when suppliers are raising concerns over long delays in receiving payments from government. Many businesses have reportedly faced cashflow challenges while waiting for government to settle outstanding invoices. Suppliers say the delays make it difficult for them to pay workers, settle debts and keep their businesses operating.
According to the association, the Eswatini Suppliers Association is a legally registered entity incorporated under the Companies Act of 2009.
The association represents micro, small, medium and large enterprises supplying goods and services to both the public and private sectors.
Mamba said the association would focus on protecting the interests of suppliers and creating a platform for them to work together in addressing their concerns.
