CORPORATE TAX REDUCTION HEADLINED PM’S PLANS

MBABANE – He has left a legacy. That is the story of the late Prime Minister Ambrose Mandvulo Dlamini who succumbed to a COVID-19-related illness in South Africa two days ago.

In April this year, the late premier had shared that Eswatini was looking ahead to a post-pandemic world, putting plans in place to position itself as a top investment destination in Africa.

In the midst of the COVID-19 pandemic that is rapidly changing the global landscape, the PM had told the rest of the world that the Kingdom of Eswatini was transforming its corporate environment to make it easier for businesses to operate. 

“We are gunning for the lead position on ease of doing business in Africa.

Confident

“Though we are currently in a coronavirus-induced lockdown, Eswatini is confident that, when the dust settles, we will use every opportunity to bring business into the country,” the premier had shared at the time.

The PM told BusinessLive at the time that Eswatini was ready to increase her competitive advantage in Africa and improve the conditions conducive to doing business. 

“Trading across Eswatini’s borders will become easier for investors as we work to fulfil the goals of our Strategic Roadmap 2019-2022,” he had highlighted.

Crafted

The roadmap was initially crafted to push the kingdom into double-digit growth and attract further foreign direct investment, but the advent of the COVID-19 pandemic derailed the country on its path.

Potential

“As it stands, we have acknowledged the complaints of potential investors — including procedures that affect and prolong the launch of businesses, delays in securing permits and trading licences, and the high corporate tax rate.

“We have also noted that investors sometimes don’t recognise the vast value that each country on the continent can offer — Africa is treated as a single entity, leading to major setbacks in investment by multinationals,” the PM had said.

Dlamini then shared the plan to reduce corporate tax from 27.5 to 12.5 per cent, making it one of the lowest corporate tax-rated nations in Africa. This is tax that is imposed on the net income of a company.

“We recognise that the corporate tax rate has a significant influence on investors, both local and foreign, as it affects the cost of their projects.

Reduction

“Investors are already reacting positively to the upcoming reduction in corporate tax. We’re receiving a slew of inquiries, and investment leads are coming to consider Eswatini an ideal location,” he had further highlighted.

The PM had said that government was committed to paving the way for businesses to come into the country and that plan would be implemented in phases.

“Furthermore, existing companies may now consider retaining their investments and expanding their operations locally instead of repatriating profits to their home countries or to lower-tax jurisdictions,” he had further said.

With the country having already established foreign direct investment leads worth E1.39 billion at the time, the PM said the value  was expected to increase to E2 billion when business conditions were loosened. 

Slashing unemployment figures was also among the premier’s major plans. He had decried the then unemployment rate of 23 per cent affecting mostly young people. 

“The government is committed to reducing high youth unemployment and creating an environment that will retain the technical talent we have.

Challenges

“While we recognise that the ease-of-doing-business measures will not be the silver bullet to address all our challenges, we are encouraged by the progress we are making in becoming a top business destination. We remain committed to the advancement of our kingdom through efforts that will drive growth and jobs for all emaSwati,” he said.

Meanwhile, the country’s business community has been equally shattered by the demise of the head of government, but they were still to react to questionnaires from this publication at the time of compiling this report. This publication wanted to establish from Business Eswatini some of the plans they shared with the late PM.

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