By Ncaba Ntshakala
On Thursday, the Eswatini Revenue Services (ERS) gathered key stakeholders from the business community at their Auditorium in Ezulwini for the official launch of the Income Tax Order Amendments, which is set to take effect on July 1, 2024.
This major legislative update will enhance the effectiveness of revenue administration while also providing much-needed relief to businesses across the nation.
ERS asserted that the amendments are designed to streamline tax processes, ensure equitable taxation, and create an inviting atmosphere for both local and international investments.
During the launch, the Eswatini Revenue Service (ERS) detailed the introduction of the new Presumptive Tax regime, which is designed to simplify tax compliance for small and medium enterprises (SMEs).
This regime is a critical component of the amendments, which promises to ease the administrative burden on smaller businesses and encourage their growth.
ALSO READ: Business Eswatini and LOGICO in co-branding partnership
One of the cornerstone changes presented was the reduction of the Corporate Income Tax rate from 27.5% to 25%.
This reduction is anticipated to stimulate new investments, support the expansion of existing enterprises, generate employment opportunities, and ultimately contribute to the robust growth of Eswatini’s economy.
The ERS provided a comprehensive overview of the Presumptive Tax, noting that it specifically excludes professionals and individuals receiving investment income.
Under this regime, businesses with a gross turnover between E0 and E50,000 will benefit from a 0% tax rate, while those with a turnover between E50,000 and E500,000 will be subject to a 1.75% tax rate.
It was also clarified that deductions for expenditures and losses incurred by these businesses will not be allowed under this final tax scheme.
Commissioner General emphasizes easier compliance and reduced costs in tax amendments
The Eswatini Revenue Services (ERS) Commissioner General Brightwell Nkambule highlighted the crucial aspects of the new tax legislation set to take effect on July 1, 2024,
expressing that the aim is to simplify compliance and reduce costs for taxpayers, particularly small and medium enterprises (SMEs).
Nkambule opened his remarks by welcoming distinguished guests, including the Principal Secretary from the Ministry of Finance Sizakele Dlamini, key business stakeholders, ERS colleagues, government officials.
He acknowledged the collaborative effort behind the amendments, expressing deep appreciation for the Ministry of Finance and other government structures involved in this significant legislative update.
The Commissioner General touched on the Minister of Finance’s budget speech from February 2023and stated the critical balance that tax policy seeks to achieve which is raising sufficient revenue to support government services without stifling economic growth.
He emphasized that the Income Tax Order Amendments are designed to improve the effectiveness of revenue administration while providing tangible relief to businesses.
One of the cornerstone changes in the amendments is the reduction of the corporate income tax rate from 27.5% to 25%.
ALSO READ: Old Mutual Thought Leadership Forum sheds light on retirement planning
Nkambule explained that this reduction is expected to stimulate new investments, encourage the growth of existing businesses, create jobs, and contribute to the overall growth of Eswatini’s economy.
This change represents a strategic move to make the country more attractive to both local and foreign investors.
Another significant introduction is the Presumptive Tax Regime, which is aimed at easing the compliance burden for smaller taxpayers.
This regime simplifies tax obligations for businesses with a turnover below E500,000, requiring them to maintain minimal records.
The tax rates under this regime are set at 0% for turnovers up to E50,000 and 1.75% for turnovers between E50,000 and E500,000.
This regime excludes professionals and individuals receiving investment income, focusing on smaller enterprises that form the backbone of the economy.
Nkambule emphasized that these changes are in line with the ERS’s broader compliance strategy, which aims to make compliance easier and reduce associated costs.
ALSO READ: Minister Manqoba hands over E2 billion Mall to developers
He invited stakeholders to engage actively during the session, promising a detailed explanation of the amendments and a thorough discussion to address any questions or concerns.
Moreover, Nkambule expressed heartfelt gratitude to the Ministry of Finance and other government bodies for their support and efforts in bringing these amendments to fruition.
“As I conclude, I would like to express our deepest appreciation to the Ministry of Finance and other Government structures for these amendments.”
Nkambule stated. “At the heart of our compliance strategy, we seek to make compliance easier and reduce compliance costs.
These amendments support our aspirations and are most grateful for the changes.”
