Wednesday 2020-05-27

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E90M FUND: NO TAKERS YET

By Zwelethu Dlamini | 2020-05-17

A month after Prime Minister Ambrose Dlamini announced the establishment of the E90 million fund aimed at relieving businesses that have been affected by COVID-19, not a single business has been able to receive the funding as yet.

There are 24 businesses that have enquired about the scheme and 18 had applied for the relief fund of which Eswatini Revenue Authority is currently doing compliance checks in line with the guidelines.

Companies who qualify will be paid their first 25 per cent of the total income tax paid in the previous tax year by May 31, 2020.

This was confirmed by Eswatini Revenue Authority (SRA) Director  Communications Vusi  Dlamini in an interview with this publication yesterday.  

“It must be mentioned that the deadline for applications have been set as the 7th of the month following the month the business is applying for. So for end of April 2020, the deadline was 7 May, which was the first deadline. For those who will apply in May, the deadline is 7 June 2020,” he said.

Dlamini stated that  nothing has been paid out thus far owing to the fact that they were still conducting compliance checks, but  revealed that from the applications received should all the companies qualify, SRA would refund the business E790 000 with E197 000 of that amount being paid as the first instalment.

Opportunity

“Otherwise based on the 18 taxpayers already checked; the overall figure of income tax paid last year is approximately E790 000. Assuming they all qualify,  then 25 per cent of this amount will be paid as the first instalment,” he said.

Dlamini then encouraged businesses that paid some income tax last year to seize the opportunity and apply for this relief.

Business Eswatini Chief Executive Officer (CEO) Nathi Dlamini,  on the other hand, said from their perspective, they were not aware of any of their members who have tried to apply for the relief package because more often than not, they exceed the E8 million turnover threshold for qualifying businesses.

“However, if the threshold had been pegged higher, a number of business entities particularly those from the hospitality, transport and logistics sectors would have immediately availed for this facility.   On that basis, one can only theorise that a number of businesses fail to meet the criteria, particularly on 100 per cent tax compliance and for having made profits last year. However, we do not have any anecdotal evidence to support the claim,” he said.

The fund was introduced as government’s commitments to assist businesses survive the partial lockdown as it is evident that the pandemic is severely affecting businesses, particularly small enterprises. 

Developments

The prime minister, when announcing, the fund said businesses that qualify for this fund were those with a turnover not exceeding E8 million who had been compliant up to the 2019 tax year.   “We will provide relief of up to E90 million to businesses with a turnover of E8 million or less which mainly are small and medium enterprises.  “This relief will be directed to businesses that have continually supported the development of the country by complying with their tax obligations, which means they have filed and paid their taxes on time up to the 2019 tax year.  This amount will be paid by way of tax refunds through the Eswatini Revenue Authority in monthly instalments of 25per cent of the actual tax paid in 2019. Specific guidelines on this relief will be provided through the Eswatini Revenue Authority,” he said.

The guidelines issued by SRA stated that the relief will be in the form of a refund of company or business tax paid in the tax year 2019, which ended 30 June, 2019. This means those taxpayers who declared losses or submitted nil returns do not qualify.

 SRA stated that this shall be effected on a month-by-month basis at 25 per cent for each month completed under the government pronounced lockdown, limited to 100 per cent of the tax paid in tax year 2019.

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