GOVT PLEDGES 7.5% CORPORATE TAX CUT IN 2020

EZULWINI– A major tax relief is on the cards for Eswatini businesses.

In its 2019-2022 strategic roadmap launched by Prime Minister Mandvulo Ambrose Dlamini at the Royal Swazi Spa yesterday, the State has made an undertaking to reduce corporate tax in phases until it reaches 12.5 per cent by 2023.

The first phase which could be implemented in July 1, 2020 will see corporate income tax being reduced by 7.5 per cent to stand at 20 per cent. The current corporate income tax rate stands at 27.5 per cent in the Kingdom of Eswatini. 

In July 1, 2021 corporate tax will also go down again by 2.5 per cent to sit at 17.5 per cent. On the same date in 2022 it will further be reduced to 15 per cent. Ultimately, corporate tax will eventually be 12.5 per cent in July 1, 2023.

Mentioned

The PM mentioned that corporate tax reduction was aimed at making the business environment in Eswatini more attractive with intent to attract more Foreign Direct Investment (FDI) in the short to medium-term.

“The corporate tax reduction and other tax relaxation measures are aimed at ensuring that the economy is private sector driven. We will also strive to foster an export driven economy by ensuring that the value of exports is improved tremendously,” said Dlamini much to the applause of captains of industry, politicians and dignitaries who crammed the auditorium.

The PM pointed out that improving Eswatini’s business environment was crucial to facilitating the private sector led recovery envisaged in the strategic roadmap.

This entails improvements in access to markets and resources for individuals and improvements in all indicators under the Ease of Doing Business Index.
“Reductions in Eswatini’s corporate income tax along with an enabling institutional environment will attract FDI, facilitate export driven growth and increase SME participation in the economy,” emphasised Dlamini.

Business Eswatini President Andrew le Roux applauded government for the commitment to reduce corporate tax. He said this was a very positive development for the private sector.

Regionally

“This will make us regionally competitive and should both incentivise new FDI and existing businesses to expand. This would obviously impact on improved tax revenue over time and also employment creation,” said le Roux.    

The PM also pledged to develop an integrated land use strategy and expedite rollout of Special Economic Zones (SEZs). It should be mentioned that four companies were currently on the run to be granted a 20 year tax holiday under the SEZ Act.

Two of the four were from America, Australia and Dubai all of whom had local partners who were credible people within our private sector.
Minister of Commerce Industry and Trade Manqoba Khumalo recently disclosed that these companies had asked for SEZ application forms to be considered for SEZ licences. The minister also mentioned that many companies had enquired about SEZs and had been provided with all information and support in collaboration with the Royal Science and Technology Park (RSTP).

Further, the head of government also undertook to improve effectiveness of investment promotion agencies and relaunch Investor roadmap programme
“We will also implement ‘E- Government’ to centralise data and systems into a single solution,” added Dlamini.





   

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