By Kwanele Dhladhla
Senate has called upon Minister of Finance Neal Rijkenberg to ensure that Micro, Small and Medium Enterprises (MSME’s) do not get frustrated by Eswatini Revenue Service (ERS) into closing shop for the sake of generating lucrative revenue figures to government financial obligations.
Senator Isaac Magagula commended ERS for impressive revenue collections during the 2024/2025 financial year.
For the year 2024/25, the ERS collected E14.6 billion, which reflected a 12.4 per cent increase from the previous financial year.
Rijkenberg disclosed that projections reflect that the revenues would increase to E16.5 billion in the 2025/26 courtesy of ERS outstanding performance which broadened the tax base as opposed to increasing tax.
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However, Magagula warned that while ERS was doing a commendable job by increasing revenues, they ought not to strangulate MSME’s to the extent that they close due to hefty penalties and other strict measures that do not consider how their businesses operate.
“When the businesses close as a result of tax issues, the blame gets shifted to government which is seen not to be protecting MSME’s.
We need assurance from the minister that the ambitious tax revenue projections will not be detrimental to operations of businesses in the kingdom,” submitted Magagula during debate of the national budget for the 2025/2026 financial year in Senate on Thursday.
Senator Lindiwe Ngwenya noted that ERS seemed to be hostile when treating MSME’s like the situation which led to an outcry by the entire business community in the past.
“The penalties are too high. This is unfair to businesses operating in the country with intent to also realise profits,” said Ngwenya.
Senator Chief Mphatfwa also shared similar sentiments. He also warned against throttling businesses into failure through harsh treatment by the revenue service.
Senator Linda Nxumalo strongly emphasised on the importance of a customer centric approach when collecting taxes.
She commended ERS for continuously conducting educational programmes aimed at empowering the nation into comprehensively understanding their tax obligations.
“The increase in tax revenue is commendable. However, it is also important that MSME’s are also afforded a chance to negotiate payment arrangements to avert closure of their businesses,” she said.
In response to the Senate concerns, Rijkenberg pointed out that it was not in the interest of government or the ERS for businesses to close.
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He said the revenue service was applies stringent measures to businesses which were found to be intentionally in breach of the law.
He made an example that some businesses in the country collect Value Added Tax (VAT) and intentionally do not remit to ERS.
He went on to state that other businesses collect Pay As You Earn but do not remit to ERS which was tantamount to fraud.
“We must all understand that collecting tax and not remitting to government is stealing from the State.
Therefore, it is important for ERS to apply stringent measures to such businesses to discourage the act,” the minister said.
Rijkenberg further stated that government was sensitive to small businesses to the extent they had recently introduced presumptive tax.
The tax system targets small business owners with an annual turnover of E500 000 or below, where their tax gets calculated in two categories.
MSMEs with an annual turnover that does not exceed E50 000 pay zero per cent in tax, while SMEs with an annual turnover that exceeds E50 000 but less than E500 000 only pay 1.75 per cent in tax.
Soon after debate of the budget on Thursday, it was referred to Senate Portfolio Committees which commences on Friday morning.
