MBABANE –Members of Parliament (MPs) have successfully passed that the controversial E200 per-day penalty charged on companies for failure to comply to tax obligations be reduced to E25.
This comes after an admission was made to the effect that the E200 daily penalty imposed on businesses for failing to submit tax returns resulted from a legislative error, with lawmakers acknowledging that the figure was never approved by either the House of Assembly or the Senate.
The admission was made yesterday during the continued debate on the adoption of the Finance Committee’s report on the Income Tax (Amendment) Bill, 2026, where members of Parliament (MPs) also debated the proposed reduction of the daily non-compliance penalty from E200 to E50.
The debate centred on concerns over the current E200 daily penalty, which MPs described as excessively punitive for businesses that fail to submit tax returns on time.
Several legislators argued that the penalty should instead be reduced to E25, while the Finance Committee maintained its recommendation of E50.
Presenting the committee’s report, Finance Committee Chairperson and Lobamba Lomdzala MP Marwick Khumalo explained that the daily charge was not a tax, but a compliance penalty designed to deter businesses from failing to submit their tax returns. He said the penalty applied to all businesses, regardless of size and was intended to encourage compliance rather than generate revenue.
Khumalo traced the history of the legislation, explaining that when the Bill was first introduced in 2023, the Minister for Finance had proposed a penalty of E250 per day. During deliberations, the House of Assembly amended the amount, while the Senate later proposed E50.
However, neither amendment was reflected in the final legislation.
“Actually, what happened in 2023 is that the Minister for Finance sought E250 per day. This is not tax; it is a small deterrent for failing to submit returns on time. The returns are for all businesses, whether big or small. It is not targeting certain businesses,” he said.
“The House of Assembly amended that figure, but unfortunately we do not know what happened because what the House agreed to was never captured. The Senate then proposed E50, but that was also not captured. Eventually, the law reflected E200, which was never approved by either the Senate or the House of Assembly.”
Khumalo said his analysis of the legislation confirmed that the E200 penalty resulted from a human error during the legislative process.
“What this means is that a mistake happened between this House and the Senate. It was a human error and, after analysing the matter, I accepted that an error had indeed occurred.”
He added that the amendment currently before Parliament was intended to correct that mistake by restoring the Senate’s proposed E50 penalty.
“The truth is that the Senate had proposed E50, but when the report came back to this House, even that amount had not been captured. Therefore, we are reverting to the E50 recommended by the Senate. The E25 that is being discussed today was never part of what was ultimately before us. God knows what happened, but when people work together, errors are bound to occur and this is one of those instances.” However, Mbabane East MP Welcome Dlamini questioned why Parliament was not supporting the minister’s proposal for a lower E25 penalty. “Why are we not accepting the E25 that the minister has submitted? What message are we sending to the people who elected us? Our term as MPs will come to an end and we will return to live among the people. We will no longer have the privilege of calling the minister for Finance or the commissioner general whenever we have problems. We will remember that we had an opportunity to make things right, but we did not. I am saying no to the E50. If you insist on it, explain the basis for that decision,” he said. Responding, Khumalo said Parliament remained free to amend the committee’s recommendation, should Members decide otherwise.
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