45 000 SMALL COMPANIES DON’T PAY TAX
SRA Commisioner General Dumsani Masilela

45 000 SMALL COMPANIES DON’T PAY TAX

The statistics of unregistered companies in Eswatini is alarming and, this is a concern for Eswatini Revenue Authority (SRA). There are about 69 000 MSMEs in the country and 45, 000 of them do not appear on SRA’s registration system. This observation was made by SRA’s Technical Tax Training Officer Lungile Mavuso during a stakeholder meeting hosted by Eswatini Enterprise and Development Company (SEDCO) at the Happy Valley Spa last
week. Stakeholders present at the meeting included representatives of Micro Small and Medium Enterprises (MSMES) as
well as Small and Medium Enterprises (SMES). Others were Investor Road Map, the Ministry of Commerce, Industry and
Trade and Centre for Financial Inclusion (CFI). The common objective of the meeting was to establish support systems in the SME sector. Mavuso said unregistered companies equated to businesses that were not registered with the financial regulator, thus affecting the collection of taxes. Mavuso reminded participants that the first process of registration starts at the Ministry of Commerce, Industry and Trade in the offices of the Registrar of Companies after which SMEs are required to come to SRA for taxation purposes. She observed that the SME sector had great potential to contribute towards revenue and if a lot of companies were not in the Tax Net, and there is resistance to tax measurements, government business is stuck. In the end everyone suffers, said Mavuso. “Ever since SRA was established in 2011, one of the main objectives of the regulator has been to achieve voluntary compliance,
meaning to date everyone who has obligation to pay tax must do so without being pushed,” said Mavuso. Mavuso agonized that the current situation where a lot of businesses were not registered meant SRA needed to invest a lot of resources into pushing tax payers to compliance, and money which should go to government business for the country was compromised as a result. “The current objective of SRA moving into the new year beginning this month is to achieve a 100% voluntary compliance for a better Eswatini, which is something that should involve everyone in
their capacity as tax payers,” said Mavuso, adding that it also talks to government in terms of providing for public goods for the nation. She said it was imperative that everyone looks at their role in terms of tax towards fulfilling the objective of SRA. SRA is looking into the compliance approach, while also acknowledging that
tax payers are not the same. There are those tax payers who know that there is tax and the need to honor obligations, and they do so; but sometimes they fall off the wagon, said Mavuso, through forgetfulness and other distractions. Mavuso said it would not be fair to say people were the same as there were those who went all the way, fulfilling the 100% compliance and that as SRA they were ready to assist in getting everyone to get to that level. Anyone who operates a business and makes money in Eswatini should know what is expected in terms of tax. Mavuso reminded participants that government doesn’t work and relies heavily on companies and individuals to
come to SRA, whose mandate is based on standing legislation. Taxes are remitted to government so she can be able to pay for public goods. Mavuso noted three key players in the tax system, with the first one being SRA whose main objective is to collect tax on behalf of government as well as compliance through application of tax rules.
Secondly, there is the tax payer who has to adhere to tax laws by submitting returns and paying taxes on time. Mavuso said as a matter of fact, paying taxes boiled down to integrity, doing the right thing even in privacy. She said evading tax didn’t help anyone as it boiled down to raising generations like accruing revenue for elderly
grants and Orphaned and Vulnerable Children (OVCs), areas that touched on everyone. She said the Free Primary Education (FPE) system depended heavily on taxation, which is a program that covered the vast majority of the citizenry.

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