MBABANE – Income tax disputes accounted for the largest share of cases before the Revenue Appeals Tribunal in 2025/2026, with corporate assessments and transfer pricing among key issues.
According to the Revenue Appeals Tribunal Eswatini (RATE) 2025/2026 Annual Report, income tax-related matters constituted the bulk of disputes brought before the institution, reflecting the complexity of tax disagreements arising between taxpayers and the Eswatini Revenue Service (ERS).
The Tribunal’s report identifies disputes involving complex corporate audits, transfer pricing adjustments and statutory deductions as some of the principal matters requiring its intervention during the financial year ended March 31, 2026.
In its breakdown of active cases, RATE indicates that income tax disputes accounted for 79 per cent of the caseload, while value-added-tax (VAT) matters represented 21 per cent.
The income tax disputes were largely centred on key provisions and amendments under the Income Tax Order, 1975, and the Income Tax (Amendment) Act, 2023.
Among the issues identified were bad debt deductions, the reduction of the corporate income tax rate to 25 per cent and transfer pricing adjustments.
These matters are particularly significant for businesses because they concern how taxable income is determined, which expenses may be deducted when calculating tax liabilities and how transactions between related companies are assessed for tax purposes.
Transfer pricing, for instance, concerns the prices charged in transactions between companies or entities that are related. Where the ERS and a taxpayer disagree over the pricing applied to such transactions, the resulting adjustments can become the subject of a tax appeal.
Bad debt deductions, meanwhile, concern the circumstances under which businesses may deduct debts that are considered irrecoverable when calculating their taxable income.
The prominence of these matters places corporate tax assessments and the interpretation of income tax legislation at the centre of the Tribunal’s work.
While income tax matters dominated the caseload, VAT disputes accounted for another significant category of appeals handled by the Tribunal.
RATE attributed these cases to disagreements surrounding mandatory VAT apportionment for mixed-use property developers and the tax treatment of zero-rated management services linked to international transport operations under the VAT Act, 2011.
VAT apportionment becomes relevant where a business conducts activities involving both taxable and exempt supplies, requiring the appropriate determination of the input tax that may be claimed.
For property developers undertaking mixed-use developments, disagreements may arise over how VAT incurred on expenses should be apportioned between different activities.
The Tribunal also identified disputes concerning the application of zero-rated VAT to management services associated with international transport operations, highlighting the complexities businesses can encounter when interpreting VAT provisions.
