LUCRATIVE INVESTOR INCENTIVES AVAILABLE FOR LOCALS

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LUCRATIVE INVESTOR INCENTIVES AVAILABLE FOR LOCALS
LUCRATIVE INVESTOR INCENTIVES AVAILABLE FOR LOCALS

Africa-Press – Eswatini. Potential investors in the manufacturing, mining, international services and tourism have been encouraged to take advantage of the Developmental Approval Order (DAO).

The DAO is one of the incentives provided by government to investors in a bid to encourage more investments in the country and grow the economy. Senior Finance Officer in the Ministry of Finance Erick Dlamini, stated that there was a low uptake from local investors to apply for this incentive, which was meant to help them. Dlamini was speaking during the second edition of the annual Business Eswatini Tax Indaba held at the Royal Villas Hotel yesterday.Dlamini shared that under this incentive, a company eligible for this concession may also be provided reduced Corporate Tax of 10 per cent for 10 years.

Development

He added that the companies may also be provided with an exemption from withholding taxes on dividends during the same 10-year tax period.He stated that the grant of a DAO was only applicable to approved new investments, business or development enterprises in the manufacturing, mining, international services and tourism sectors and the grant was available to both local and foreign direct investment. Dlamini added that there were still more incentives for investors in the special economic zones (SEZ) and they included; exemption from the payment of corporate tax for an initial period of 20 years and thereafter, corporate tax shall be charged at 5 per cent.

He said another incentives for SEZ investors was the remission of customs duty, Value Added Tax (VAT) and any other tax payable in respect of goods purchased for use of raw material, equipment, machinery, goods and services related to manufacturing in the special economic zone. He said investors would be entitled to an allowance for research and development and they may be exempted from foreign exchange control.

Infrastructure

The Minister of Finance Neal Rijkenberg said the significance of tax policy in shaping the economy could not be overstated. He said effective tax legislation and administration were fundamental to ensuring that they could finance public services, invest in infrastructure and provide for the welfare of the citizens. “However, we recognise that there is always room for improvement. Our tax system must be dynamic and responsive to the needs of our economy, particularly in supporting the growth of the private sector and small and medium-sized enterprises (SMEs),” said the minister. Rijkenberg said government has repeatedly stated that SMEs were the backbone of the economy. He said SMEs drove innovation, create jobs and contributed significantly to the gross domestic product (GDP).

He said yet, they often faced unique challenges, particularly in navigating complex tax regulations and compliance requirements. Rijkenberg said to address these challenges, government must focus on creating a tax environment that was not only fair and efficient, but also conducive to the growth and sustainability of SMEs. He said this was where the spirit of collaboration and partnership becomes crucial.

Resolution

He said as government, they were committed to working closely with the business community, the Eswatini Revenue Service (ERS), tax professionals and all stakeholders to ensure that our tax policies are designed to support business growth, while also safeguarding our fiscal stability. The minister reiterated government’s commitment into to enhancing tax dispute resolution mechanisms to ensure that they were efficient, fair and accessible. Rijkenberg said disputes were an inevitable part of any tax system, but how we handle them can significantly impact the business climate. By improving these processes, we aim to foster a more business-friendly environment, where disputes can be resolved swiftly and justly.

During yesterday’s seminar, deliberated in detail were the recent and upcoming changes in tax policies and their implications for businesses, highlights on tax incentives available to businesses in order to encourage economic growth, and issues related to double taxation agreements and international tax compliance in view of regional and continental trade agreements. The Eswatini Revenue Service (ERS) updated participants on a number of issues, including the recent changes to tax laws, regulations, or policies and how the ERS was leveraging technology to enhance tax collection, reporting and communication while also upscaling initiatives aimed at streamlining tax processes and reducing administrative burdens for tax payers.

Landmark

The seminar also took cognisance of the role that the regulatory framework played in harmonising the tax landscape, as the Revenue Appeals Tribunal of Eswatini (RATE) led discussions on landmark cases and their implications for tax compliance and dispute resolution purposes while also advising participants on alternative dispute resolution options they needed to consider before escalating matters to the RATE.

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