BE Press Statement on the Extension of Tax Deal

On 27th July 2022 Business Eswatini in collaboration with ERS and revenue Appeals Tribunal convened a first-of-its-kind national Tax Indaba, dubbed Tax-Talk in which every stakeholder imaginable was represented; delegates were drawn from big and small business, women and indigenous-owned businesses, including businesses owned by PLD’s (people living with disabilities) as well as the youth under the Youth Chamber. The primary aim of the conference was to teach and capacitate tax payers about taxation, especially the complexities of the country’s tax regime.  Attendees were also introduced to the mechanics of our tax laws, including the proposed amendments which are sponsored by government.

This was a long overdue conversation which resulted in a vibrant and constructive debate amongst participants.  ERS, thankfully, was at hand to respond to questions real time while BE moderated the dialogue. There were tax experts retained by BE who took the time to handhold attendees on the tax guidelines as well as highlighting to tax authorities the shortcomings and possible pitfalls of some of the proposed tax clauses.

Resolutions or recommendations that came out of the event were, namely, a) that the proposed amendment regarding worldwide taxation be held in abeyance until the economy fully recovers from pandemic doldrums. Attendees, supported by BE leadership, claimed that a worldwide tax could scare off investors which are desperately needed by the country. b) there was a recommendation that the proposed capital gains tax has to be put on hold even though attendees did concede that the whole world was beginning to move towards this type of tax. Notwithstanding, they insisted that Eswatini is in a precarious position due to high unemployment and social strife which demanded that the country be cautious about its investor-unfriendly tax proposals against the pressing needs of creating jobs. C) There was also a proposal that BE should pursue the matter of an extension of the Debt Relief Amnesty programme under the ERS. The expiration of the amnesty was today (Friday 5th August, 2022). We are very pleased today that Business Eswatini has pursued this matter successfully as today we have come here to jointly announce the extension as well as acknowledge ERS for working tirelessly behind the scenes to deliver on what was not only BE’s request, but a request from the floor of the tax indaba.

On behalf of BE membership and the whole private sector in general, we would like to thank the Hon Minister of Finance as well as the Commissioner General of ERS for responding positively to our request. The transformation of ERS away from an Authority into a service institution is now being felt by all of us and it is a breath of fresh air. We have no doubt that all tax payers do recognize the transformation. To recompense ERS for taking the first step of waving the olive branch to tax payers, all we can do is to encourage taxpayers to make every effort to be tax-compliant. ERS has assured us that should a tax payer run into a problem, they are now willing to sit down and listen and make a plan. The bottom line, they said, is that they now want to engage tax payers before they adopt harsher alternative measures, which still remain at their disposal

It was a landmark tax event without equal and BE has been lavished with accolades for organizing the event which ended up being over-subscribed. A second instalment of the event is being discussed. The tax extension means the Tax Indaba is now delivering the results.

Business Eswatini

Business Community and ESERA hold Successful “Power-Talk”

One of the major objectives of the Indaba was to discuss the issues around the availability and sustainability of energy supply in the country, especially post 2025. It was felt that it is important to have an open conversation on this matter especially around the guarantee of future supplies of electricity as well as on the migration from fossil fuels to the more desirable and sustainable green energies. With the widespread reports of energy shortages which might necessitate load-shedding, it was felt that all stakeholders need to come together to look for ingenious ways to avert this threat. As the country seeks alternative sources of energy, which the private sector has already begun doing, the gathering felt that we need to be mindful and sensitive to the price-points at which these alternatives will be offered. Another issue which the gathering felt strongly about was the need for BE to be to consider matters of climate change as said matters require urgent attention.

BE were very pleased to note the cordial manner in which the engagements were conducted between business, the electricity supplier and the energy regulator which is something that was encouraging to all. Furthermore, the energy regulator did mention that we are in the midst of a regional energy crisis which he said could be overcome by Eswatini as the country is well endowed with biomass which can make it possible for the country to move towards renewable energy at a faster speed. He also alluded to the fact that energy is a key driver of economic development and as such, it was imperative for the regulator to be involved in this meeting, not only just to share regulatory information with attendees, but to also gather ideas from the business community.

BE are still yet to reflect on the key insights from this engagement. However, we are grateful as an organization to all members who represented the private sector meaningfully in this important discourse and we also wish to thank all stakeholders for the sheer spirit of cooperation which they displayed during this landmark energy indaba.

We will give further updates on this in due course.

ATTACKS ON BUSINESS A GROWING CONCERN

As a Federation of Employers as well as a Chamber of Commerce our commitment is primarily to our members and the private sector at large. As a secretariat, we take this mandate seriously even though at times we may fall short of expectation.

Equally, we feel it is our duty to ensure that the environment in which we do business is conducive as well as safe for all investors, especially BE members.  Through our extensive networks, BE has done a lot to encourage both foreign and local investors into the country and our record in this regard is unimpeachable. However, attracting investors without a retention strategy is foolhardy at best. To this end, BE has done a considerable amount of work to ensure that the businesses we already have in the country are retained despite the advent of what seems to be a less-than-friendly environment in which to do business.

We devote resources into retaining investment projects so that they continue to create the jobs desperately needed in the country, especially by our youth whose unemployment currently stands at a staggering 58%. This figure even in the best of times is completely untenable.

The national unemployment rate also sits, alarmingly, at no less than 34% which is something that bears testimony to the pressing need to expedite job-creation in the country, through foreign and local direct investment projects. And jobs can only be created when investors, both foreign and local, choose to invest in this country as their preferred investment destination. There is no other way to create jobs than for people to found businesses and hire Emaswati; which means the artificial hurdles and barriers we have erected in the marketplace have to be addressed as they are frustrating investors unnecessarily.

It is for this reason that Business Eswatini would always be the first to complain bitterly when policies or initiatives which are investor-unfriendly are being promoted in the country. As an organization we are obsessed about job creation but we are also not unmindful of the inescapable fact that jobs can only come from entrepreneurs and risk-takers who decide to take a chance and invest in the country. 

To demonstrate Business Eswatini’s sincerity to promote investment and create new jobs in the country, we decided, as everyone is aware, to convene a landmark dialogue between workers and employers. And, thankfully, it was a resounding success in terms of meeting its stated objectives. The aim of this bipartite dialogue was, amongst others, to explore opportunities which could be leveraged in order to fast-track the country’s job-creation agenda. Whilst employers and workers may have had their differences during dialogue, they were, however, one-minded on the issue of retaining investors who create the jobs desperately needed by the masses. One is therefore thankful to have learnt an important lesson that despite our differences, there is always a way in which people can find each other if the determination to do so exists.  

It is on the basis of the foregoing that the spate of destruction and attacks being suffered by both foreign and local investors in the country is now of grave concern to us.

Through natural business linkages and empowerment programs, most investors coopt smaller companies to participate in some major national project.  Unfortunately, it is these very same local companies end up bearing brunt of these attacks. Jobs are being lost as we speak which is akin to one cutting one’s nose to spite one’s face.

As Business Eswatini we call for restraint all round, for the sake of protecting existing jobs. For the sake of the unemployed. Increasingly, and sadly, our country’s standing as a viable foreign direct investment destination is being steadily compromised. Critical sectors that employs thousands of Emaswati such as textile, major construction companies, retailers, and so forth, have suffered irreparable damage in a space of only a few months. That is disheartening.