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MBABANE -   The Eswatini Revenue Authority (SRA) and Eswatini Government are opposing the application filed by the British American Tobacco Swaziland (PTY) Limited.

The company wants the High Court to declare that the Alcohol and Tobacco Levy Act of 2019 is inconsistent with the Constitution.
Through lawyers from S.V Mdladla and Associates, SRA has since filed a notice of its intention to oppose the application.   

The reasons for opposing the application will be outlined in the papers which SRA lawyers and government are yet to file.
The Bill was passed into law on August 23, 2019 and it provides for the imposition and collection of levy on alcoholic drinks and tobacco products.
When the Bill was debated in June 2016, British American Tobacco Swaziland (BATS) submitted that the introduction of the levy would increase trade in illicit cigarettes, which was then estimated to account for 24- 30 per cent of the local market. BATS estimated the government’s annual losses in revenue to illicit cigarette at E17 million.


BATS is a company incorporated and registered in Eswatini that markets and distributes British American tobacco products in the country through its partner, Ocean. These tobacco products comprise well known global cigarette brands such as Dunhill, Pall Mall, Rothmans and Peter Stuyvesant. The company has operated in the country for more than 100 years.

The tobacco products are manufactured in South Africa by British American Tobacco South Africa (BATSA) and imported to Eswatini by BATS.
Respondents in the matter are the Minister of Finance and the Commissioner General of Eswatini Revenue Authority (SRA).
The applicant, British American Tobacco Swaziland (BATS) further wants the court to direct SRA to repay the levies it (applicant) paid to the authority from August 23, 2019.

Mduduzi Lokotfwako, who is director of BATS, submitted that the levy was defined as tax and was ‘levied and charged’ on both tobacco products manufactured in and imported into Eswatini.   The levy according to Lokotfwako is, two per cent ‘taxable value’ for manufactured tobacco products, calculated as the total consideration paid in money and seven per cent of the taxable value for imported tobacco product, calculated as the sum of; the value of the goods ascertained for the purposes of customs duty plus the amount of customs duty, excise tax and other fiscal charge, other than Value Added Tax, payable on those goods.


“BATS respectfully contend that Section 61 of the Constitution of the Kingdom of Eswatini requires that government must promote respect of international law and treaty obligations,” submitted Lokotfwako.

The levy, according to BATS comprised an additional duty on tobacco products that was in breach of Eswatini’s international law and treaty obligation under, among others the Southern African Customs Union Agreement (SACU) and the General Agreement on Tariffs (GATT), including the national- treatment principle that prohibits discrimination between imported and domestically produced goods.

He averred that in Section 20 (1) the Constitution provides that all persons were equal before and under the law. Lokoftwako argued that the levy discriminated against importers of tobacco products in favour of local manufactures of such products without a legitimate basis to do so.  He claimed the levy infringed BATS’ right not to be deprived of property under Section 19 and to trade freely under Section 32(1) of the Constitution.

“The Constitution promotes the rule of law which requires that Parliament enact laws that are not arbitrarily and bear a rational relationship to the achievement of a legitimate governmental purpose, the Act and the levy do not bear a relationship and the Act is the product of a flawed and irrational process,” submitted the director.

He also argued that the levy comprised an additional duty on tobacco products that was allegedly introduced in contravention of the Customs and Excise Act, 1971.
Lokotfwako submitted that there was no indication that the Act, being a money bill imposing tax, followed the process prescribed by the Constitution for the passing of the money bills.  He said as a result, the Act should be set aside and all payments purportedly received under it should be returned.


“The Act and the levy is irrational, in conflict with the rule of law rationality requirement under the Constitution and is void,” he argue.
These are allegations whose veracity is still to be tested. According to Lokotfwako, BATS made representation to the minister  regarding the 2012 Bill, the 2016 Bill and the 2019 Bill and despite not persisting with the 2021 and 2016 Bills, seemingly as a result of these representations, the 2019 Bill was nonetheless passed into law in a form  largely unchanged from earlier iterations.

He averred that this was done without BATS representation having been properly addressed and without relevant consideration being taken into account.
“The preceeding Bills and Act do not set out the purpose of the levy and the minister and SRA have committed to contradictory positions regarding what the true position is.

The Bills and the Act were not product of an evidenced- based analysis of whether the levy would achieve its intended objective,” contended the applicant. The matter is still pending in court and appearing for BATS is Kenneth Motsa of Robinson Bertram while Eswatini Government is represented by Assistant Attorney General Mbuso Simelane.

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