Companies that did not update their payroll systems and benefit valuations following the 2024 Practice Note on Benefits-in-Kind may now face significant tax liabilities, Business Eswatini has warned.
Addressing a full house at the 2026 Tax Indaba, held at the Happy Valley Hotel, Business Eswatini (BE) Chief Executive Officer E. Nathi Dlamini stated that what many employers previously considered routine staff perks have quietly become compliance risks.
“Yesterday’s loosely administered benefits have become today’s significant compliance exposure,” Dlamini told business leaders, finance professionals, HR practitioners, and procurement officers gathered under the theme ‘Yesterday’s Benefits. Today’s Tax Risk!!’
The Indaba, attended by the Honourable Minister of Finance and officials from the Eswatini Revenue Service (ERS), addressed the implications of the 2024 Practice Note on the Taxation of Benefits in Kind and Certain Allowances.
Dlamini stated that many businesses failed to promptly update their systems with the new guidance when it was introduced. “In 2024, the Practice Note was released, and, honestly, many of us just kept scrolling,” he said. “Payroll operated as usual. Housing valuations remained unchanged. Car allowances continued without proper logbooks.”
Two years later, he warned that those administrative oversights could now create significant compliance risks. The issues identified included company vehicles classified as perks without proper valuation, housing benefits calculated using outdated figures, and soft loans given to employees without following the required formula-based calculations.
“The company car you thought was a perk? Taxable. The housing benefit valued the way you always have? Possibly understated. The soft loan was extended on trust? There is a formula for that,” he said.
Despite the strong warning, BE emphasized that the engagement was not about intimidation but about providing companies with practical tools to address gaps.
“Compliance is not about fear. It is about clarity,” Dlamini said. “When you know the rules and understand the valuation methods, you can protect your business.” He emphasized that the presence of ERS officials at the Indaba signaled openness to dialogue rather than enforcement action.
“They are not hiding. They are not ambushing. They are here to explain, to clarify, and to help you get it right,” he told delegates.
In his keynote speech, the Minister of Finance, Neal Rijkenberg, discussed the tightening of benefits-in-kind administration within the larger framework of fiscal sustainability. He explained that the government is operating in a limited fiscal environment where domestic resource mobilization is crucial for protecting national development goals and reducing vulnerability to external shocks.
The Practice Note, he explained, is part of a broader effort to improve tax administration, clarify legal standards, and safeguard the integrity of the tax base. Fairness, he added, remains a key focus of the reform agenda.
“When some evade their obligations, the compliant majority bears an unfair burden,” the Minister said, noting that enforcement of compliance is about fairness rather than intimidation.
The Minister outlined three pillars guiding the government’s tax reform strategy: expanding the tax base through economic growth and formalization, strengthening compliance and closing loopholes, and accelerating digitalization to simplify tax filing and payments through ERS systems.
He acknowledged that some businesses have raised concerns about interpretation, transitional issues, and valuation tables embedded in the Practice Note. He appreciated BE’s plan to gather stakeholder feedback and submit a formal position paper for the government’s review. “Structured, technically grounded proposals are welcome,” he said.