MBABANE – The Revenue Appeals Tribunal Eswatini has ruled in favour of ITQNET Investments (Pty) Ltd in a long-standing tax dispute involving E8 844 147.70 tax liability.
The tribunal’s ruling came after finding that the Eswatini Revenue Service (ERS) failed to respond to the company’s (ITQNET) objection to a revised tax assessment within a reasonable period.
In a judgment delivered on October 8, 2026, the Tribunal found that the ITQNET’s objection had been allowed by operation of law after ERS took approximately 10 months to issue its decision. It consequently upheld ITQNET’s preliminary objection and ordered the revenue service to pay the costs of the proceedings.
The dispute arose from an audit conducted by ERS into ITQNET’s tax affairs, during which the revenue service disallowed several expenses claimed by the company as deductions in calculating its taxable income.
This resulted in a revised assessment raising an additional tax liability of E8 844 147.70, inclusive of penalties.
ITQNET, which provides information technology services and counts the Government of Eswatini among its clientele, disputed the disallowance, maintaining that the expenses were incurred in the production of income and should, therefore, have been allowed as deductions.
The company subsequently lodged an objection with ERS on April 16, 2025, in terms of Section 52 of the Income Tax Order, 1975. However, the revenue service only communicated its decision on February 19, 2026.
ITQNET challenged the validity of that decision, arguing that ERS had failed to act within the reasonable period required by law and that its objection had consequently succeeded before the late response was issued.
Pay now, argue later principle examined
MBABANE – Another important issue concerned ERS’s reliance on the ‘pay now, argue later’ principle, which the revenue service had invoked in its dealings with ITQNET.
The Tribunal considered correspondence in which ERS indicated that the company would be expected to make payment or enter into a formal payment arrangement, warning that failure to do so could result in alternative recovery measures.
The correspondence further indicated that the objection would be deemed invalid until payment was made.
While recognising the principle as an established feature of tax administration, the Tribunal said it should not be interpreted as allowing ERS to disregard its separate obligation to determine objections.
It referred to Section 55 of the Income Tax Order, which provides that the obligation to pay tax is not ordinarily suspended by an objection or appeal, unless the Commissioner General directs otherwise.
However, the Tribunal explained that this provision deals with the payment and recovery of assessed tax and does not make payment a prerequisite for the consideration of an objection under Section 52.
It held that the right of ERS to recover tax and the right of a taxpayer to pursue an objection are distinct rights which may operate concurrently.
The revenue service was therefore not entitled to defer determining ITQNET’s objection solely because the disputed assessment remained unpaid.
