Times Of Swaziland: LUCRATIVE INVESTOR INCENTIVES AVAILABLE FOR LOCALS

LUCRATIVE INVESTOR INCENTIVES AVAILABLE FOR LOCALS
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Nhlanganiso Mkhonta on 20/06/2024 07:34:00


MBABANE – Potential investors in the manufacturing, mining, international
services and tourism have been encouraged to take advantage of the Developmental
Approval Order (DAO).
The DAO is one of the incentives provided by government to investors in a bid to
encourage more investments in the country and grow the economy. Senior Finance
Officer in the Ministry of Finance Erick Dlamini, stated that there was a low
uptake from local investors to apply for this incentive, which was meant to help
them. Dlamini was speaking during the second edition of the annual Business
Eswatini Tax Indaba held at the Royal Villas Hotel yesterday.Dlamini shared that
under this incentive, a company eligible for this concession may also be
provided reduced Corporate Tax of 10 per cent for 10 years.
Development
He added that the companies may also be provided with an exemption from
withholding taxes on dividends during the same 10-year tax period.He stated that
the grant of a DAO was only applicable to approved new investments, business or
development enterprises in the manufacturing, mining, international services and
tourism sectors and the grant was available to both local and foreign direct
investment. Dlamini added that there were still more incentives for investors in
the special economic zones (SEZ) and they included; exemption from the payment
of corporate tax for an initial period of 20 years and thereafter, corporate tax
shall be charged at 5 per cent.
He said another incentives for SEZ investors was the remission of customs duty,
Value Added Tax (VAT) and any other tax payable in respect of goods purchased
for use of raw material, equipment, machinery, goods and services related to
manufacturing in the special economic zone. He said investors would be entitled
to an allowance for research and development and they may be exempted from
foreign exchange control.
Infrastructure
The Minister of Finance Neal Rijkenberg said the significance of tax policy in
shaping the economy could not be overstated. He said effective tax legislation
and administration were fundamental to ensuring that they could finance public
services, invest in infrastructure and provide for the welfare of the citizens.
“However, we recognise that there is always room for improvement. Our tax
system must be dynamic and responsive to the needs of our economy, particularly
in supporting the growth of the private sector and small and medium-sized
enterprises (SMEs),” said the minister. Rijkenberg said government has
repeatedly stated that SMEs were the backbone of the economy. He said SMEs drove
innovation, create jobs and contributed significantly to the gross domestic
product (GDP).
He said yet, they often faced unique challenges, particularly in navigating
complex tax regulations and compliance requirements. Rijkenberg said to address
these challenges, government must focus on creating a tax environment that was
not only fair and efficient, but also conducive to the growth and sustainability
of SMEs. He said this was where the spirit of collaboration and partnership
becomes crucial.
Resolution
He said as government, they were committed to working closely with the business
community, the Eswatini Revenue Service (ERS), tax professionals and all
stakeholders to ensure that our tax policies are designed to support business
growth, while also safeguarding our fiscal stability. The minister reiterated
government’s commitment into to enhancing tax dispute resolution mechanisms to
ensure that they were efficient, fair and accessible. Rijkenberg said disputes
were an inevitable part of any tax system, but how we handle them can
significantly impact the business climate. By improving these processes, we aim
to foster a more business-friendly environment, where disputes can be resolved
swiftly and justly.
During yesterday’s seminar, deliberated in detail were the recent and upcoming
changes in tax policies and their implications for businesses, highlights on tax
incentives available to businesses in order to encourage economic growth, and
issues related to double taxation agreements and international tax compliance in
view of regional and continental trade agreements. The Eswatini Revenue Service
(ERS) updated participants on a number of issues, including the recent changes
to tax laws, regulations, or policies and how the ERS was leveraging technology
to enhance tax collection, reporting and communication while also upscaling
initiatives aimed at streamlining tax processes and reducing administrative
burdens for tax payers.
Landmark
The seminar also took cognisance of the role that the regulatory framework
played in harmonising the tax landscape, as the Revenue Appeals Tribunal of
Eswatini (RATE) led discussions on landmark cases and their implications for tax
compliance and dispute resolution purposes while also advising participants on
alternative dispute resolution options they needed to consider before escalating
matters to the RATE.