MBABANE - The Eswatini Revenue Service (ERS) has filed an application before the High Court seeking to halt proceedings at the Revenue Appeals Tribunal Eswatini.
This has to do with in an ongoing tax dispute involving USA Distillers (Pty) Ltd.
In a Notice of Motion deposed to by ERS Commissioner General Brightwell Nkambule, the revenue service is applying for a stay of proceedings under case number RATE/IT/-028/2015, which is currently pending before the tribunal.
The application, set down for hearing on May 29, 2026, also seeks a review and setting aside of a tribunal decision issued on March 6, 2026, which allowed the taxpayer (USA Distillers) to introduce new evidence during the appeal process.
ERS further wants the tribunal to be directed to file the full record of proceedings and provide reasons for its decision within 14 days, in line with Rule 53 of the High Court Rules.
Central to the court application is ERS’s objection to the tribunal’s decision to allow USA Distillers to submit new computations during the appeal.
In his founding affidavit, Nkambule states that the tribunal had earlier indicated that the appeal would proceed primarily on the original record, with any new evidence only admissible under exceptional circumstances.
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…ERS audits focuses on loan arrangement, sales agreements
MBABANE – According to Nkambule, the audit focused on transactions between USA Distillers and its holding company, USA Holdings Ltd, particularly a loan arrangement and related sales agreements.
ERS states that the loan had no fixed repayment terms and carried no interest, while the parent company retained exclusive rights to purchase the company’s production at predetermined prices.
The affidavit outlines several observations made during the audit, including:
The funding structure was considered questionable
The sales arrangement was directly linked to the funding agreement
Prices remained unchanged over a four-year period despite rising operational costs
The company reported minimal profits and recorded a loss in one of the years under review.
ERS also notes that the transactions involved jurisdictions outside its tax treaty network.
The affidavit details an extensive audit process which included multiple requests for information, extensions granted to the taxpayer and several engagements between the parties.
USA Distillers was notified of the audit in August 2021 and requested extensions to submit required documentation, which ERS granted.
Submissions were eventually made in September 2021, followed by meetings, site visits and functional interviews aimed at understanding the company’s operations, assets and risk profile.
ERS states that further information was requested in December 2021, with additional engagements continuing into 2022. A Draft Letter of Findings was issued in October 2022, proposing transfer pricing adjustments, to which the company responded with management comments.
ERS responded to these comments in December 2023 and indicates that due to the absence of key documentation, including a transfer pricing policy, it relied on available data sources to finalise its assessment.
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