44 000 UNREGISTERED SMES IN ESWATINI

MBABANE – Some animals are more equal than others. This famous adage best describes the situation faced by the over 55 000 Eswatini businesses compelled to pay taxes while 44 000 of their counterparts enjoy their profits tax-free due to the fact that they are not formally registered in accordance with the Companies Act No.8 of 2009.

As a result of this predicament, which was uncovered during the Micro, Small and Medium Enterprises (MSME) FINSCOPE Survey undertaken in 2017, the country loses out on revenue that could add onto the fiscus to bolster the economic development.

In the Kingdom of Eswatini, an SME refers to a business whose turnover is below E50 000 (micro) and does not exceed E8 million (medium).
Ministry of Commerce, Industry and Trade Director in the SME Unit Mluleki Dlamini said the continuous operation of businesses without the appropriate documentation posed a huge threat to development of the private sector in the kingdom.

Disclosed

Dlamini disclosed that from the 1 604 unregistered SMEs unearthed during the 2010 survey there had been a huge increase to 44 518 businesses, which were fully operational across all four regions of the country. He explained that this effectively meant 75 per cent of SMEs were unregistered, which remains a huge cause for concern to the State.

“These unregistered businesses continue to lose out on a number of interventions and incentives intended at improving both their livelihood, entities and hone their business skills,” Dlamini pointed out during the Eswatini Economic Policy Analysis and Research Centre lecture conducted at Happy Valley Hotel yesterday.                   

   
Dlamini mentioned that programmes which have been introduced by government recently to bolster include introduction of an Informal Traders Revolving Fund (ITRF) in collaboration with the Eswatini Finance Development Corporation (FINCORP) where SMEs could get funding of up to E50 000 and Loan Guarantee Scheme to assist businesses that seek credit but do not have collateral being implemented in partnership with the Central Bank of Eswatini (CBE).

Training

“We have also introduced a training programme on standardisation in partnership with the Eswatini Standards Authority which could greatly assist SMEs to improve their products and also make their produce competitive beyond local borders. However, it remains difficult for businesses that are not formally registered to tap into such opportunities,” added Dlamini.

Eswatini Revenue Authority (SRA) Commissioner General Dumisani Masilela said it was very disturbing that there were over 44 000 businesses do not contribute to fiscus.

“It is important to ensure that these businesses are formally registered so that they pay up what is due to the State,” said Masilela.   
The CG clarified that businesses which were formally registered as companies in Eswatini were obligated to pay 27.5 per cent corporate tax while sole traders paid up to 33 per cent of their profits as taxes.

Federation of the Eswatini Business Community (FESBC) Chief Executive Officer Dudu Nhlengetfwa projected that in the next survey to be undertaken there was a strong likelihood that the number of unregistered businesses could increase.

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