Times Of Swaziland: ONLY 5% OR NO TAX - GOVT

ONLY 5% OR NO TAX - GOVT
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BY KWANELE DHLADHLA  on 24/01/2018 03:45:00


MBABANE – A proposed tax relief, which could see Small and Medium Enterprises
(SME’s) paying either three or five per cent of their yearly income or nothing
at all, now lies in the hands of Cabinet.
If a business makes less than E41 000 in their yearly assessment, they will be
expected to pay nothing at all to the Swaziland Revenue Authority (SRA).
However, if the business makes more than E41 000 but not more than E500 000,
they will be expected to pay five per cent of their income after a review of
their yearly assessment as stipulated in the draft Income Tax Amendment of 2017.
 Principal Secretary in the Ministry of Finance, Bheki Bhembe, said the draft
amendment which will only apply to businesses registered under presumptive tax
with the SRA in terms of the act, would soon be deliberated by Cabinet where it
would be decided as to whether the recommendation to further reduce it to three
per cent is adopted.
Thereafter, the bill will be tabled to Parliament for further deliberations,
which will culminate in Royal assent.
“We will have to wait until such time when Cabinet has approved a reduction of
the (presumptive tax),” briefly said Bhembe when asked whether government had
approved the proposed further reduction of the five per cent presumptive tax.
It should be mentioned that SMES or ‘small business’ in accordance with the
proposed amendment means any taxpayer who is ordinarily resident or carrying on
business in Swaziland whose turnover derived from carrying on of that business
was less than E500 000 in a year of assessment, unless the Commissioner in a
particular case otherwise directs.
It should be mentioned that following consultations with all relevant
stakeholders that included the business community, there had been a strong
recommendation to reducing the tax rate for businesses under presumptive tax to
three per cent.
This was in line with the government’s intention to widen the tax base by
making it easier for SME’s to be tax compliant.
A tax expert advised that the cost of tax collection should not exceed
collections and could likely be a disincentive for SME’s.  “The SME tax
payer regime should be better off under a presumptive regime and as such the
proposed amendments would only be productive if there is actually savings of
both time and cash by taxpayers and simultaneously a widening of the country’s
tax base. The government would need to carefully consider tax thresholds and
rates,” he said.