BY MBONGENI NDLELA
LOBAMBA – Businesses will be pleased with the news that has been brought by Minister of Finance Neal Rijkenberg in as far as corporate tax is concerned.
Corporate tax is a tax imposed on the net income of the company.
The minister informed the House of Assembly when tabling the 2022/2023 budget on Friday that corporate tax was being reduced from 27.5 percent to 25 percent.
“This is in line with the rest of the world reducing tax rates and aims to assist companies to grow quicker and helps to solve our unemployment problem,” he said.
To balance the loss in the reduction in corporate tax, the minister said government will also include a review of the initial allowances, penalties on late submissions on pay as you earn (PAYE), capping of losses carried forward, and the increase of the rate of withholding tax on interest for non-residents from 10 percent to 15 percent.
In addition, the minister said government intended to introduce a tax on worldwide income for the residents of the Kingdom of Eswatini.
“It is envisaged that these measures will make the poor better off,” Rijkenberg said.
Government will meanwhile also bring in capital gains tax to guard against businesses that are evading paying tax.
“Government is introducing a capital gains tax for businesses that is aimed at closing loopholes that businesses are using to pay less tax,” the minister said.
Capital Gains Tax is a tax on the profit when you sell (or ‘dispose of’) something (an ‘asset’) that’s increased in value.
It’s the gain you make that’s taxed, not the amount of money you receive
For example, if you bought property for E300 000 and sold it later for E500 000, that means you made a gain of E200 000.
In as far as Small and Medium Enterprises (SMEs) are concerned, Rijkenberg announced that government will be introducing presumptive tax to simplify their administrative processes and remove the requirement of audited financials for payment of tax.
