Sunday 2024-06-16

advertisement

FULL STORY

2.5% CORPORATE TAX RATE CUT EFFECTIVE JULY

By Nomfanelo Maziya | 2024-05-27

Eswatini Revenue Service (ERS) Commissioner General Brightwell Nkambule unpacking the details of the Income Tax Order Amendments of 2023, highlighted that these amendments would come into effect on July 1.

During the media briefing held at ERS headquarters yesterday, Nkambule noted that these changes represented a significant shift in the country's tax landscape, with a focus on stimulating investment and easing the burden on smaller businesses.

“You will recall that the minister of finance, in his budget speech in February this year, made the following statement: ‘Raising sufficient revenue to support the provision of government services remains important for us as a country and finding the delicate balance between raising sufficient revenue without stifling economic growth is what tax policy aims to achieve’.

It is in this regard that in the coming fiscal year we will see the coming into effect of the Income Tax Order Amendment, 2023.

‘‘This legislation brings changes that will improve effectiveness in revenue administration while simultaneously providing relief to businesses,” said Nkambule.

The most headline-grabbing change is the reduction in the corporate income tax rate from 27.5 per cent to 25 per cent.

The commissioner general noted that this 2.5 per cent reduction signified a clear intention by government to bolster business activity.

He said this move ‘is expected to have a multifaceted impact as lower corporate taxes can make Eswatini a more attractive destination for foreign direct investment (FDI). ‘‘Businesses will have more capital available for reinvestment in existing operations or expansion into new ventures,’’ according to Nkambule.

Increase
He further noted that increased investment often led to job creation. Furthermore, Nkambule cited that a thriving business sector was the cornerstone of a robust economy and therefore ‘by lowering the tax burden, government hopes to encourage business growth’, ultimately contributing to a stronger national economy.

“The corporate income tax rate is reduced from 27.5 per cent to 25 per cent. This is expected to stimulate new investment and encourage the growth of existing investments, create more jobs and improve their contribution to the growth of our economy,” he said.

Nkambule also underscored that the Income Tax Order Amendments also introduced the Presumptive Tax Regime, specifically designed to ease compliance burdens for smaller businesses. This regime, according to Nkambule, caters to businesses with a gross turnover below E500 000, allowing them to maintain minimal records.

“This regime excludes professionals and persons receiving investment income. A zero per cent rate is applicable for taxpayers with turnover up to E50 000 while a 1.75 per cent rate is applicable for turnover from E50 000 to E500 000,” said Nkambule.

‘‘This regime will not apply to professionals or those earning income solely from investments as they will be subject to the standard corporate tax regime,’’ according to the CG.

“This is a final tax, meaning deductions for expenses or incurred losses are not allowed,” he said.
Director of Legal Operations Henry Sukati, unpacking some other changes, highlighted withholding tax changes.

“Withholding tax for non-resident shareholders will increase from 12.5 per cent to 15 per cent while non-resident’s tax on interest will increase from 10 per cent to15 per cent,” said Sukati.
He said branch profits would increase from 12.5 per cent to 15 per cent.

“The payment date will be on or before the 15th day of the month following the month of payment and a penalty of E25 per day applies until the return is received,” said Sukati.

share story          

Email Google LinkedIn Print Twitter

Post Your Comments Below









OTHER STORIES


All eyes are on Central Bank of  Eswatini as (CBE) Governor Dr. Phil Mnisi as he will delive...

read more         

Former minister of Commerce, Industry and Trade Gideon Dlamini has finally heaved a sigh of relie...

read more         

THE founder of Sitfombo Atelier Sitfombo Dlamini has recently launched her new house of fashion t...

read more         

The Standard Bank Eswatini employee, Delisa Malinga – who is accused of unlawfully receivin...

read more         



World News