By Zweli Martin Dlamini

MBABANE:The Eswatini Revenue Service (ERS) has allegedly linked it’s tax compliance systems with the Ministry of Finance-Treasury Department with an alleged intention to track and detect Government suppliers owing tax and/or violating the country’s tax laws by failing to file annual tax returns and pay due taxes.

An independent investigation conducted by this Swaziland News this week uncovered that, the system or collaboration between the Treasury Department and ERS, allows the Eswatini Government to withhold outstanding taxes as per the recommendations from the Eswatini Revenue Service and then, pay the supplier the balance.

It has been disclosed that, when competing for tenders, some Government suppliers “normally receive a Tax Clearance from ERS, being a confirmatory document suggesting that, the company is complying the country’s tax laws” only to find that, by the time Government processes the payments, some companies have long neglected their tax obligations.

Filing of annual tax returns form part of the legal obligation by taxpayers both individuals and corporate entities to adhere to the country’s tax laws, Government is also a registered collector of the Value Added Tax (VAT).

As a result, the tax is collected mostly from Government suppliers and then, remitted to the revenue service under the Tax Identification Number (TIN) of that particular company doing business with Eswatini Government.

Responding to a questionnaire from this Swaziland News independent online publication, Ntobeko Dlamini, the Spokesperson of the Eswatini Revenue Service said, Legal Notice 484 of 2022, places a legal obligation on every organisation in the country (both public and private) to only purchase from tax compliant businesses.

“The notice orders that organisations must request Tax Compliance Certificates as part of their procurement system. As cited, this requirement applies to all

organisations in both the private and public sectors. Sections 49(1) of the Income Tax Order as well as Section 45(1) of the VAT Act empower the Commissioner General to appoint any relevant organisation to be a collecting agent with respect to a supplier who is non-compliant. For example, the CG may use these Sections of legislation to appoint Government to direct payments due to a supplier to the ERS, instead of paying the suppliers directly; the same applies with all other suppliers in the Kingdom of Eswatini. The ERS facilitates educational programmes in a bid to make everyone aware of these provisions as well as to emphasise the importance of doing business with only tax compliant businesses. These education and information dissemination campaigns complement internal compliance monitoring systems which assist with timeously identifying and processing non-compliant taxpayers,” said the ERS Spokesperson.

But apart from that, the Eswatini Revenue Service has been collaborating with banks and other financial institutions to enforce tax laws.

Companies and individuals owing tax are normally flagged by the Eswatini Revenue Service and subsequently had their bank accounts frozen pending engagements and payment arrangements.

It has been disclosed that, before reaching the freezing of bank accounts stage, the ERS “engages the taxpayer” in an effort to ensure tax compliance and/or payment of outstanding taxes.