By Inside Biz
Micro and Small Medium Enterprises (MSME), including informal traders and spaza shops, will now have more simplified access to tax registration and compliance, thanks to the introduction of Presumptive Tax.
Presumptive Tax is a new tax regime developed for MSMEs in response to past concerns raised by small business owners regarding the cost of compliance, which they said was not affordable for their types of businesses.
The tax system targets small business owners with an annual turnover of E500 000 or below, where their tax will be calculated in two categories. MSMEs with an annual turnover that does not exceed E50 000 will pay 0% in tax, while SMEs with an annual turnover that exceeds E50 000 but less than E500 000 will only pay 1.75% in tax.
Vusi Ngcamphalala, Commissioner for Domestic Taxes at Eswatini Revenue Services (ERS) confirmed that the registration for this new tax system is live for small businesses to register.
“We understand how demanding running an SME can be, and that is why this tax regime has reduced the administrative burden where only basic record-keeping will be required from the SMEs. We encourage small businesses who meet the qualifying criteria to register with the ERS to ensure compliance,” he said.
Minimal documentation required for registration
Ngcamphalala explained that this will include, but is not limited to informal traders, transport owners, airtime vendors, spaza shop owners, etc.
“You can either register as an Individual/Sole Trader or a Company. ERS requires minimal documentation to register,” he said. “For an Individual/Sole Trader, clients need to provide their ID, proof of business address or letter from the Chiefdom, and proof of residential address.”
When registering for a Company, Ngcamphalala said that clients need to submit a Certificate of Incorporation or founding documents, Form J, Trading license, proof of banking details, proof of business address, and ID of Public Officer/nominated person/tax representative.
Youth Start-Ups Urged to Register and Enjoy Benefits
Notably, the introduction of the Presumptive Tax will encourage young people to register their businesses and reap the benefits of formalization. This is the view of Junior Achievement (JA) Eswatini’s Executive Director, Phetsile Masilela.
JA is an organization that empowers youth in entrepreneurship, with over 1500 young people that it is supporting this year to start businesses and believes that the new system is a build-up on previous years’ achievements.
“This is a great move towards improving the country’s economy because the youth are no longer skeptical about starting fully registered businesses. We anticipate an increase in young people registering their businesses even for taxation. We commend our government for this move,” she said.
According to Masilela, being tax-compliant for young people is very important because it will help them align with the country’s legislation.
“They will also be positioning their businesses for more and bigger opportunities to get clients in the formal sector because the clients will need their TIN numbers. Even when they apply for loans and more, their TIN will be required. In the long run, they will also contribute towards the country’s economy by contributing to tax collected by ERS to support the country’s needs,” she explained.
Masilela pledged they will work hard to encourage the youth to register their businesses for Presumptive Tax. She added that they will also liaise with ERS on how to roll out this program to more young people in the country.
MSMES Project Growth Through Simplified Compliance
The Swazi Commercial Amadoda, representing many small businesses on Swazi Nation Land and transport owners, has expressed contentment with the Presumptive Tax.
The Acting President of the organization, Dumisani Mamba, encouraged all businesses under them to register for the simplified tax regime.
“Presumptive Tax is here to support local small businesses, including those operating in the rural areas, to get out and be a formal business. It will help us grow so that we do not remain small forever. I encourage businesses to register,” he said, noting that being fully registered will help them access tenders and make more money; hence, their members must be aware of the registration.
“Commercial Amadoda is also collaborating with the ERS to teach and raise awareness about this tax regime to its members. We have been to some of the branches to educate our members about this new system. We are well-versed on what it means and how it will impact our members for the good of their business,” he said.
Mamba noted that the system will reduce compliance costs of engaging external consultants to help with Income Tax Returns. He said that in the past, some businesses would need to go to accountants who would help them submit returns, but some would guess the numbers, creating a high debt because they did not understand taxes.
“We welcome that ERS will help us with the submission and compliance. We will ensure we encourage compliance so that businesses do not get to a stage of estimating. They must record transactions daily,” he said.
ERS has made the registration process straightforward, offering multiple platforms for convenience.
ERS Acting Director Marketing Communications, Ntobeko Dlamini urged businesses to register via the ERS website, using a USSD code (*4050#), or by visiting any ERS Service Centre.
For online registration, businesses need to visit the ERS website, click on the “Presumptive Tax” tab, select the appropriate registration type, fill in the details, attach necessary documents, and submit. The USSD and physical registration processes are equally simple, ensuring wide accessibility.
Simplified Ways to Register:
- ERS Website Registration:
- Visit the ERS website: www.ers.org.sz
- Click the “Presumptive Tax” tab
- Click “Register” on the Presumptive Tax banner ▪
- Select “Register Non-Individual” or “Register Individual”
- Fill in the required details ▪
- Attach the required documents ▪
- Click “Submit”
- Mobile Phone & Physical Registration:
▪ Dial *4050# on your mobile phone
▪ Select your Preferred Language
▪ Select “Presumptive Tax”
▪ Select “Register”
▪ Fill in the required details ▪ Click “Confirm” ▪
You will get confirmation that encourages you to complete your registration by submitting certified copies of the required documents at the ERS Service Centre that is nearest to you.
- Physical Registration:
▪ Visit your nearest Service Centre.
▪ Provide supporting documents.