By Miguel Tomé de Medeiros
Eswatini now taxes gains on business assets, but a sale signed outside the kingdom can still hand a local company to a new owner without a single Lilangeni reaching the Eswatini Revenue Service.
A bottling plant cannot move. Neither can a sugar estate in the Lowveld or a timber plantation in the Highveld. Ownership, however, moves easily. Many Eswatini companies are held by a parent abroad, often in South Africa, which may itself belong to a group listed in London or Johannesburg. When that parent is sold, nothing is signed in Mbabane, and the gain is booked far from the assets that created it.
Think of selling the company that owns a house rather than the house itself: The deeds office never records a sale. Specialists call this an “offshore indirect transfer”. Unless the law clearly reaches such sales, the gain can escape tax where the value was created.
This matters for the government’s own goals. The 2026/27 budget expects about E31.4 billion in revenue, of which roughly E11.7 billion is due to come from the Southern African Customs Union. More than a third of the budget therefore rests on a formula that Mbabane does not control. The Eswatini Revenue Service has done impressive work on the rest: domestic revenue reached E15.72 billion in 2025/26, more than three times the level of 2012/13. Every lilangeni collected at home makes the kingdom less exposed to the next SACU swing.
Eswatini has already taken an important step. Since July 1, 2024, under the Income Tax (Amendment) Act 2023, gains on the disposal of business assets, including shares, form part of taxable income. But a non-resident is taxed only on income from an Eswatini source, and the law does not clearly say when the sale of a foreign company that owns an Eswatini business counts as an Eswatini sale. A South African seller of shares in an Eswatini company is also protected by the tax treaty, unless the company’s value comes mainly from immovable property in Eswatini.
The neighbours have acted. South Africa taxes non-residents selling shares that derive 80 per cent or more of their value from South African immovable property, where the seller holds at least 20 per cent. Botswana treats gains on shares in companies holding its mineral rights as Botswana-source, and Namibia taxes indirect transfers of mining and petroleum licences. Zambia extended its property transfer tax to indirect share transfers, and Kenya has taxed such sales since 2023.
A current deal shows how these transactions cross borders. Coca-Cola HBC, listed in London and Athens, is buying 75 per cent of Coca-Cola Beverages Africa (CCBA) for US$2.6 billion, valuing the bottler at US$3.4 billion. CCBA operates in 14 countries, Eswatini among them, through Eswatini Coca-Cola Beverages, majority-owned by CCBA since 2019. Completion is expected by the end of 2026. Control of an Eswatini bottler will change, yet nothing will be signed in the kingdom. Eswatini is a small share of that group’s value, and the parties are entitled to rely on the law as written. The real test will come when the business sold abroad is mostly Eswatini: a sugar estate, a plantation, a hotel.
Enforcement counts as well. Galp sold its 10 per cent interest in Mozambique’s Area 4 gas block to XRG, an arm of Abu Dhabi’s state oil company ADNOC, for about US$881 million on completion. Mozambique’s tax authority has claimed capital gains tax of around €162 million (roughly US$175 million); Galp contests it before the World Bank’s arbitration centre. That single claim is worth about E2.9 billion, close to a fifth of everything ERS collected at home last year. However it ends, clear rules put a country at the table when its assets change hands.
The fix need not be complicated:
- A clear value test. Gains on shares in any company, local or foreign, that derives most of its value from Eswatini land, mineral rights or business assets would be Eswatini-source.
- A duty on the local company to report. When its ultimate ownership changes, the Eswatini company, the party ERS can actually reach, would notify ERS and share liability if the tax goes unpaid.
- Use of existing checkpoints. Merger notifications to the Eswatini Competition Commission and transfers of mining licences could require evidence that the tax question has been settled.
Spotting these deals is the harder half. My tool, Transfer-Radar, watches publicly announced cross-border deals every day, matches each against the rules of more than 100 countries, and estimates the tax potentially at stake, from capital gains to stamp duty and transfer taxes. It flags the ultimate owners and when tax falls due, and can check a taxpayer’s own computation, deadlines, interest and penalties. On a sample of transactions, assuming the gain equals 40 per cent of the price, it produces indicative figures of about US$7.4 billion of potential tax across 42 jurisdictions, roughly US$1.3 billion of it in Africa. These are orders of magnitude, not assessments. Tax administrations, ministries and international organisations have asked for demonstrations.
None of this is anti-investor. Serious investors prefer clear rules to later disputes, and most would rather settle tax at closing than face an assessment years afterwards. Gaps mostly benefit the largest, best-advised groups; a local family selling its business has no such option. Value created in Eswatini should be taxed in Eswatini, and a short amendment would bring the 2024 reform to its natural conclusion.
Miguel Tomé de Medeiros is an international tax adviser with 14 years’ experience in oil and gas, commodities and fintech, an IBFD correspondent and a contributor to Tax Notes.
Disclosure: the author built and runs Transfer-Radar and may offer it commercially to tax administrations. Its figures are indicative estimates, not tax assessments. He does not act for any party to the transactions mentioned.
