COMPANIES OWING E101M: IT’S PURE TAX EVASION - NEAL

MBABANE – The Minister of Finance, Neal Rijkenberg, has reacted to the reports that 37 companies owe over E101 million tax to ERS, labelling it as ‘pure tax evasion’.

Tax evasion is using illegal means to avoid paying taxes which, in the context of Eswatini, are paid to the Eswatini Revenue Service (ERS).
ERS has approached the High Court for endorsements of writs of execution against the 37 companies which allegedly owe the taxman E101 826 762.94.

Rijkenberg said the companies were given an opportunity, through the tax amnesty limited-time offer by government to a specified group of taxpayers, to pay a defined amount, in exchange of forgiveness of a tax liability (including interest and penalties), relating to a previous tax period, as well as freedom from legal prosecution. The minister said the companies were supposed to register their problems and make a commitment to repay the principal tax, which is the money that businesses took, on behalf of government, from their clients or the pay as you earn (PAYE) deducted monthly from employees.

Rijkenberg said companies which did that were forgiven on all of their interests and their penalties. The minister said the exercise was highly successful as companies owing about E3 billion in tax came forward, made the commitment to pay at differing intervals of 12 to 24 months and they were continuing to pay the tax. He said through the exercise, government had been robbed of billions of Emalangeni, but the positive thing was that the companies were continuing with business.

The minister said he had not spoken to ERS, at the time of compiling this report, on what the status of the 37 companies was in terms of the tax amnesty, but he was presuming that they had not come forward through the exercise to register their problems. When queried on what the ministry’s stance was in terms of the possible job losses aspect when looking at the owed moneys and the number of companies, Rijkenberg said unfortunately there were laws which had to be followed.

“This is pure tax evasion, bayaganga nje, because for instance, if a company deducts PAYE from the employee but does not remit it, that is government’s money, not theirs and they should be held accountable. It is not like the money demanded by government comes from nowhere, but it is money they have specifically withheld on behalf of government and it should be remitted (sic),” he said.

Dealerships

On locating companies, particularly car dealerships who seem not to be in their known business premises anymore as their sites of operation are empty, Rijkenberg said they would locate them. “If the site is empty, it does not necessarily mean they are out of the country. If they are in the country anywhere, obviously we will pursue them. We have agreements with other countries and we can use legal means to pursue them, but if they have skipped the country then it could be difficult to pursue them,” he said.

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