Africa-Press – Eswatini. The Income Tax Order Amendments of 2023 that will come into effect on July 1, 2024, aim to improve compliance, enhance revenue collection and encourage investment in the Eswatini economy.
Yesterday, the Eswatini Revenue Service (ERS) had an opportunity to engage some members of the business community to unpack the changes coming with the Income Tax Order Amendments of 2023.
The changes include the corporate income tax rate, which has been reduced from 27.5 to 25 per cent. This is expected to stimulate new investment and encourage the growth of existing investments, create more jobs and improve their contribution to the growth of the economy.
Another change is the introduction of a Presumptive Tax Regime that is intended to ease the costs of compliance for smaller taxpayers. Presumptive Tax Regimes, also known as simplified Tax Regimes, simplify the tax compliance process for micro and small business. By reducing tax compliance costs and levying lower tax rates compared to the standard tax system, these regimes aim to encourage business formalisation and compliance. This regime enables taxpayers with turnover below the threshold of E500 000 to keep minimal records. This regime excludes professionals and persons receiving investment income.
The rates are as follows:
A 0 per cent rate is applicable for taxpayers with a turnover f up to E50 000.
A 1.75 per cent rate is applicable for turnover from E50 000 to E500 000.
Director of Legal Operations at ERS Henry Sukati shared that there will also be changes on the withholding tax, where by non-resident shareholders will see their tax rates increase from 12.5-15 per cent. He said non-resident tax on interest will also increase from 10-15 per cent and branch profits tax rates will also increase from 12.5-15 per cent.
Sukati said capital allowances will decrease from 50-30 per cent. He said the minimum threshold is now E5 million. He said treatment of gains and losses on disposal of business assets to be included in taxable income. The cCost base of a business asset is measured at market value with special rules.
He said the carrying forward of losses has been limited to a period of five consecutive years of assessment with the exclusion of timber and orchard plantations. He said the timber and orchard plantations were excluded because of the nature of these businesses, as it took more years for the plantations to mature.Sukati said timber plantations shall be allowed to carry forward losses up to a stage where the timber has matured while orchard plantations shall be allowed to carry over losses of up until such time the orchard becomes productive.
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