COURT DISMISSES TAX EXEMPTION APPLICATION

MBABANE - An application by Swaziland Lottery Trust (PTY) Limited to be exempted from paying income tax has been dismissed by the High Court.

Swaziland Lottery Trust (PTY) Limited operates a lottery business around the country and has lotto shops in Mbabane, Manzini, Siphofaneni, Nhlangano, Simunye, Matata and Siteki. In the High Court it was, among other prayers, seeking a declaratory order that it should be exempted from paying income tax as it paid levies to the Gaming Board. The company further wanted the court to review and set aside a decision made by Eswatini Revenue Services (ERS) on March 23, 2017.

Order

Swaziland Lottery Trust (PTY) Limited was also praying for an order directing the respondent ERS  to refund it a sum of E4 822 433.66  the applicant (Lottery Trust (PTY) Limited) paid during the period of March 31,2014 to February 14,2017. In its application the applicant submitted that it had since 1995 paid taxation to the Gaming Board by way of levies as stipulated in the Lotteries Act. It was further the applicant’s contention that since the start of business in 1995, it was making losses and was subjected to ERS taxation. The applicant submitted that in 2013 it made its first profit and the respondent taxed the company in respect of income derived from its lottery business. In opposition, ERS averred that levies allegedly paid by the applicant were provided for in the Lotteries Act. ERS also argued that because the levies were not paid to it they did not amount to tax. The respondent further denied that the applicant was subjected to double taxation and averred that there was no prejudice suffered by the applicant. It was further argued on behalf of ERS that the Income Tax Order of 1975 specified income to be exempted from tax and income generated from lotteries was not specified therein as being exempted.

Declaratory

The respondent contended that the declaratory order that was sought by the applicant could not be granted because the Lotteries Act was subservient to the Income Tax Order in as far as it dealt with the taxation of income and since the applicant was not exempted under the Income Tax Order. In her judgment, Principal Judge Qinisile Mabuza agreed with the respondent that levies payable to the Gaming Board were not income tax as stipulated by the Income Tax Order. The court said income tax was payable to the Eswatini Revenue Services. “No evidence has been placed before this court as to the ultimate destination of the lottery levies after they reach the Gaming Board.

Admission

"They clearly do not end up with the Revenue Authority otherwise the respondent would have made an admission to that effect,” said the principal judge in her judgment. She said it followed therefore that the decision that was made by the respondent stands.  The court said there would be no order reviewing and setting it aside.  It was further the court’s decision that there would be no refund of monies already paid to the respondent as income tax. ERS was represented by Nkosinathi Manzini while appearing for Swaziland Lottery Trust (PTY) Limited was Mlungisi Khumalo.

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