‘FLAWED’ SPECIAL ECONOMIC ZONES BILL PASSED INTO ACT

MBABANE – The ‘flawed’ Special Economic Zones Bill of 2017, which allows investors to enjoy a 20 year tax holiday, has been passed into an Act.

According to legal notice number 29 which was issued last Friday, the new legislation will be known as the Special Economic Zones Act, 2018.

The legislation has been enacted despite calls by the Federation of Swaziland Employers and Chamber of Commerce (FSE&CC) that the law is weak and would not derive the desired benefits for the country.

President Andrew le Roux advised that the law was weak on the basis that there were over 3 600 special economic zones across the globe which should compete with the Local Act which has a board made up of entirely civil service and giving the minister of Commerce, Industry and Trade unilateral authority to withdraw a licence, a factor that has been viewed to be detrimental in the process of attracting Foreign Direct Investment.

“The legislation does not address the challenges faced with FDI attraction at a broader prospective. These issues include registering a company, high electricity costs, and expensive internet together with 24 hour access to markets,” argued le Roux.   

           
Both domestic and foreign investors that will set up business at or around King Mswati III International Airport and at the Royal Science and Technology Parks will not pay the 27.5 Corporate Tax for 20 years according to the Special Economic Zones Act, 2017. As that is not enough, after the elapse of the 20 years, the companies will then pay five per cent corporate tax forever.

However, le Roux pointed out that low taxes alone would not be sufficient to attract FDI. He contended that the bill ought to address broader issues affecting the business environment.

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