Africa-Press – Eswatini. The Federation of Eswatini Business Community (FESBC) has called upon government to consider consulting local businesses before foreign investors when taking business-related decisions.
FESBC Head of Transformation Mavela Sigwane when reacting to the latest developments regarding the Corporate Tax, which had since been dropped to 25 per cent from 27.5 per cent, said they have just learnt that the Minister of Finance, Neal Rijkenberg, was able to convince senators to accept the reduction of Corporate Tax. He said as local businesspeople they were wondering as to what informed the decision to place the Corporate Tax at 25 per cent not lower or higher than that. Sigwane said they gathered that the minister said the proposal was aimed at drawing more investors to the country. Last week the minister told senators that global trends were forcing government to consider the reduction of taxes.
Investors
He noted that investors were running to countries like Mauritius and South Africa (SA) because of the lower taxes. He said if the countries reduced the taxes, investors would flock in, thus increasing the gross domestic product (GDP) and alleviate poverty. On Thursday, the Chairperson of the Senate Portfolio Committee on Finance, Tony Sibandze, when presenting the report mentioned that they eventually agreed on the proposed reduction of tax and it was incorporated to the passed Bill. In his reaction, Sigwane said clearly this was informed by the foreign investors’ demands.
Occupying
Sigwane opined that government had a soft spot for the foreign investors over local investors, whereas the locals were also up occupying the space as well. He argued that government would often exempt the foreign investors from paying tax for some period of time but that never happened for the locals even if they were starting their businesses from stretch. During the sitting at Senate last week it was also finalised that all retirement packages would be taxed up to 25 per cent. This will come into effect once the Income Tax Amendment Bill is gazetted into an Act, after senators passed the Bill last Thursday.
Proposal
The Bill was tabled in March 2023, after the Minister of Finance, Rijkenberg, announced that there was a proposal to increase Pay-As-You-Earn (PAYE) tax from 33 to 36 per cent. The minister said this during the budget speech. The Part III of the Bill proposed that people who would be getting a retirement or redundant package of up to E330 000, would be taxed up to 25 per cent. The Bill also proposed that packages exceeding E330 000 would be taxed up to 30 per cent. When sought for comment, the minister of Finance could not be reached by the time of compiling this report and he had not responded to a questionnaire sent to him.
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