APPEALS TRIBUNAL DISMISSES VEHICLE PARTS RETAILER'S APPEAL

MBABANE – The Revenue Appeals Tribunal Eswatini (RATE) has dismissed an appeal brought by a vehicle parts retail and repair business against the Eswatini Revenue Service (ERS).

In its judgment, the tribunal upheld the tax authority’s assessment of additional tax liabilities.

The ruling, which centres on disputes over income tax, gross income and allowable deductions, reinforces ERS’s stance on tax compliance and financial record-keeping requirements for businesses.

Appellant

The case, which was adjudicated by RATE, involved a challenge by the appellant against ERS’s decision to impose additional tax assessments.

The business argued that certain income should not have been included in its taxable earnings and that various deductions claimed should have been allowed.

However, the tribunal ultimately ruled in favour of ERS, stating that the appellant had failed to substantiate its claims adequately.

The dispute arose from an ERS tax audit that assessed the appellant’s income tax liabilities. ERS determined that the business had underreported its taxable income and had claimed deductions that did not meet the legal requirements under Eswatini’s tax laws.

Non-taxable

The appellant contested the assessment, maintaining that ERS had incorrectly included non-taxable income in its calculations and had unfairly disallowed legitimate business expenses.

The appeal, which was brought before RATE, sought to reverse ERS’s decision and secure relief from the additional tax liabilities imposed.

The appellant’s case rested on two primary arguments:
1.     Inclusion of non-taxable income: The business claimed that ERS had wrongly classified certain receipts as taxable income, arguing that these amounts should have been excluded from gross income.
2.     Allowable deductions: The appellant insisted that various business expenses it had deducted from taxable income were legitimate and should not have been disallowed by ERS.

In response to the appeal, ERS maintained that its tax assessments were based on accurate financial records and applicable tax laws. The tax authority argued that the appellant had failed to provide sufficient documentary evidence to support its claims and that the disputed deductions did not meet the requirements outlined in the Income Tax Order.

RATE, after reviewing the evidence presented by both parties, ruled in favour of ERS.

The tribunal found that the income in question was rightly classified as taxable under Eswatini’s income tax laws.

It also found that the appellant failed to provide adequate proof to justify the deductions it claimed.

Authority

Additionally, the tribunal found that ERS had lawfully exercised its authority in assessing the additional tax liabilities.

As a result, the Tribunal dismissed the appellant’s appeal, affirming that the additional tax assessments imposed by ERS would stand.

The tribunal’s ruling reinforces the principle that businesses must maintain clear and accurate financial records to support their tax filings. The decision also underscores the strict evidentiary standards required when contesting tax assessments.

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