BY MBONO MDLULI
MBABANE – Eswatini Revenue Service (ERS) has partnered with the police and the Director of Public Prosecution (DPP) to remove tax and custom crimes.
Today (Thursday, May 30, 2024), the ERS hosted a collaborative retreat with key stakeholders, including the Royal Eswatini Police Service (REPS) and the DPP. According to information from ERS social media pages, the purpose of the retreat was to encourage people doing business in the country to make it a habit to voluntarily comply, in order to remove these crimes.
“The purpose of the engagement is to explore innovative strategies under the theme ‘Working together to improve voluntary compliance through effective fighting against tax and customs crimes.”
The ERS believes that with voluntary compliance as the central focus, such events are a valuable opportunity for information sharing of expertise and implementing innovative strategies. The ERS expressed commitment to fostering a fair and transparent tax environment in Eswatini, and the organisation described this retreat as a significant step in achieving that goal.
According various online sources, tax crimes, such as tax evasion, threaten the strategic, political and economic interests of both developed and developing countries. They also undermine citizens’ confidence in their governments’ ability to get taxpayers to pay their taxes and may deprive governments of revenues needed for sustainable development.
According to Golding Lawyers (www.goldinglawyers.com), the most common tax crime is tax evasion. This is a situation where a person may underreport income (which is especially true in situations in which the income was cash (and not easily traceable), and/or the income was earned from overseas, without it being formally reported.
Falsifying a business expense is one of the common examples of tax evasion. An example of such is when a certain person has a foreign consulting business in which she travels around the country, trying to retain clients to purchase her design services. This person also likes to travel as a hobby, eat at fine restaurants, and drive fancy cars. Therefore, she expenses certain pricey dinners and vacations as business expenses, when clearly she was not engaging in any business for the expenses she claimed.
Another example of tax evasion is taking improper tax deductions. For example, a certain businessman does not have a home office which he uses specifically for business, but he claims a portion of a very large den in his home as a home office in order to reduce his taxes. In addition, the businessman also included medical expenses that he never really had in order to increase his schedule itemised deductions, and thereby reducing his tax liability.
Custom crimes include importing and exporting products without properly declaring them at a country’s point of entry/exit, with an intention of concealing them to reduce a tax liability. It can be described as a form of tax crime that happens between two or more countries.
