Times Of Swaziland: COURT DISMISSES TAX EXEMPTION APPLICATION

COURT DISMISSES TAX EXEMPTION APPLICATION
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BY MBONGISENI NDZIMANDZE on 05/10/2021 08:12:00


MBABANE - An application by Swaziland Lottery Trust (PTY) Limited to be exempted
from paying income tax has been dismissed by the High Court.
Swaziland Lottery Trust (PTY) Limited operates a lottery business around the
country and has lotto shops in Mbabane, Manzini, Siphofaneni, Nhlangano,
Simunye, Matata and Siteki. In the High Court it was, among other prayers,
seeking a declaratory order that it should be exempted from paying income tax as
it paid levies to the Gaming Board. The company further wanted the court to
review and set aside a decision made by Eswatini Revenue Services (ERS) on March
23, 2017.
Order
Swaziland Lottery Trust (PTY) Limited was also praying for an order directing
the respondent ERS  to refund it a sum of E4 822 433.66  the applicant (Lottery
Trust (PTY) Limited) paid during the period of March 31,2014 to February
14,2017. In its application the applicant submitted that it had since 1995 paid
taxation to the Gaming Board by way of levies as stipulated in the Lotteries
Act. It was further the applicant’s contention that since the start of
business in 1995, it was making losses and was subjected to ERS taxation. The
applicant submitted that in 2013 it made its first profit and the respondent
taxed the company in respect of income derived from its lottery business. In
opposition, ERS averred that levies allegedly paid by the applicant were
provided for in the Lotteries Act. ERS also argued that because the levies were
not paid to it they did not amount to tax. The respondent further denied that
the applicant was subjected to double taxation and averred that there was no
prejudice suffered by the applicant. It was further argued on behalf of ERS that
the Income Tax Order of 1975 specified income to be exempted from tax and income
generated from lotteries was not specified therein as being exempted.
Declaratory
The respondent contended that the declaratory order that was sought by the
applicant could not be granted because the Lotteries Act was subservient to the
Income Tax Order in as far as it dealt with the taxation of income and since the
applicant was not exempted under the Income Tax Order. In her judgment,
Principal Judge Qinisile Mabuza agreed with the respondent that levies payable
to the Gaming Board were not income tax as stipulated by the Income Tax Order.
The court said income tax was payable to the Eswatini Revenue Services. “No
evidence has been placed before this court as to the ultimate destination of the
lottery levies after they reach the Gaming Board.
Admission
"They clearly do not end up with the Revenue Authority otherwise the respondent
would have made an admission to that effect,” said the principal judge in her
judgment. She said it followed therefore that the decision that was made by the
respondent stands.  The court said there would be no order reviewing and setting
it aside.  It was further the court’s decision that there would be no refund
of monies already paid to the respondent as income tax. ERS was represented by
Nkosinathi Manzini while appearing for Swaziland Lottery Trust (PTY) Limited was
Mlungisi Khumalo.