Table of Contents
- Introduction: The Landscape of Tax Law in Eswatini
- Key Regulatory Bodies and Legal Framework
- Major Tax Law Reforms for 2025
- Corporate Taxation: New Rates and Compliance Requirements
- Personal Income Tax: Thresholds, Deductions, and Penalties
- Value Added Tax (VAT) and Indirect Taxes: What’s Changing?
- Tax Compliance and Enforcement: Strategies and Penalties
- Recent Statistics: Revenue Collection and Economic Impact
- Future Outlook: Predicted Tax Reforms Through 2030
- Official Resources and Guidance for Staying Compliant
- Sources & References
Introduction: The Landscape of Tax Law in Eswatini
The landscape of tax law in Eswatini is shaped by a dynamic interplay of legislative reforms, administrative modernization, and regional economic integration. As of 2025, the country’s tax regime is governed primarily by the Income Tax Order, 1975, the Value Added Tax Act, 2011, and periodic amendments introduced to enhance revenue collection and compliance. The Eswatini Revenue Service (ERS) is the principal authority responsible for tax administration, policy enforcement, and taxpayer services.
Over the past few years, Eswatini has placed increased emphasis on tax compliance and broadening the tax base. Notably, in 2023, the government implemented a digital tax system to streamline filing and payment processes, aiming to reduce evasion and improve transparency. The ERS also intensified public awareness campaigns and compliance enforcement, resulting in greater registration of taxpayers and improved tax collection efficiency.
Key taxes in Eswatini include personal income tax, corporate income tax, Value Added Tax (VAT), and customs duties. The standard corporate tax rate remains at 27.5%, while the top marginal personal income tax rate is 33%. VAT is levied at a flat rate of 15%. Tax revenue accounts for approximately 26% of Eswatini’s GDP, with VAT and income tax being the main contributors. In the 2023/2024 fiscal year, the ERS reported a revenue collection of E12.1 billion, marking an increase from previous years due to improved compliance and economic recovery measures (Eswatini Revenue Service).
Looking ahead, Eswatini’s government has signaled continued reforms to align its tax laws with international best practices and regional commitments, particularly as a member of the Southern African Customs Union (SACU) and the Southern African Development Community (SADC). Priorities include enhancing digital infrastructure for tax administration, adopting anti-base erosion and profit shifting (BEPS) measures, and fostering a more taxpayer-friendly environment. These efforts are expected to support fiscal sustainability, attract investment, and drive economic growth in the coming years (Ministry of Finance).
In summary, tax law in Eswatini is evolving to meet both domestic fiscal needs and global standards. With ongoing reforms and a focus on modernization, the legal and compliance environment for taxation is set to become more robust and efficient through 2025 and beyond.
Key Regulatory Bodies and Legal Framework
The tax law landscape in Eswatini is overseen by several key regulatory bodies, with the legal framework grounded in both statute and administrative regulation. The principal authority responsible for tax administration and compliance is the Eswatini Revenue Service (ERS), established under the Revenue Authority Act, 2008. The ERS administers all national taxes, including income tax, Value Added Tax (VAT), customs duties, and excise taxes.
The chief statutes governing tax in Eswatini are the Income Tax Order, 1975 (as amended), and the Value Added Tax Act, 2011. These statutes set out the obligations for individuals, businesses, and other entities regarding assessment, collection, and payment of taxes. The legal framework is supplemented by various regulations and practice notes issued by the ERS, which clarify compliance requirements and administrative procedures.
- Income Tax: The Income Tax Order outlines the taxation of individuals, companies, and other entities. The ERS is responsible for issuing assessments, collecting taxes, and conducting audits to ensure compliance. The current corporate income tax rate is 27.5%, while the highest marginal rate for individuals is 33% (Eswatini Revenue Service).
- VAT: The VAT Act mandates a standard rate of 15%, with certain goods and services being zero-rated or exempt. The ERS manages VAT registration, filing, and enforcement.
- Customs and Excise: Customs administration aligns with the Southern African Customs Union (SACU), and is governed by the Customs and Excise Act, 1971. The ERS oversees import and export duties within this framework (Eswatini Revenue Service).
The Ministry of Finance, through policy direction and legislative proposals, plays a pivotal role in shaping tax policy and enacting reforms. Legislative changes are enacted by the Parliament of Eswatini, often in response to regional obligations, economic needs, or international standards. The judiciary, particularly the High Court of Eswatini, serves as the forum for resolving significant tax disputes and interpreting tax laws.
As of 2025, Eswatini is pursuing modernization of its tax administration, with ongoing enhancements in electronic filing, taxpayer education, and enforcement mechanisms. These efforts aim to improve compliance rates and revenue mobilization, crucial for fiscal sustainability in coming years (Eswatini Revenue Service).
Major Tax Law Reforms for 2025
In 2025, Eswatini stands at a pivotal juncture in its tax law landscape, driven by a government-led agenda to modernize and strengthen fiscal governance. The Ministry of Finance and the Eswatini Revenue Service (ERS) have set in motion a series of legislative reforms aimed at widening the tax base, increasing compliance, and aligning domestic laws with international standards.
A cornerstone of the 2025 reforms is the anticipated enactment of an updated Income Tax Order. This reform seeks to address gaps in the current framework, including clearer definitions of taxable income, a review of corporate and personal income tax rates, and stricter provisions against tax evasion. These changes are part of Eswatini’s commitment to the Southern African Development Community (SADC) tax harmonization agenda and the recommendations of the African Tax Administration Forum (ATAF), pushing for increased transparency and regional cooperation.
Another major development is the planned overhaul of Value Added Tax (VAT) regulations. The ERS has proposed to adjust VAT exemptions and zero-rating rules to better target essential goods and services, while minimizing revenue leakages. These reforms are expected to help maintain VAT as a leading contributor to national revenue, which accounted for approximately 35% of total tax collections in 2023, according to the Eswatini Revenue Service. The ERS is also focusing on digitalizing VAT administration, with mandatory electronic invoicing and real-time reporting for larger enterprises, to take effect in 2025.
Compliance measures are being reinforced through the introduction of more robust transfer pricing rules and the adoption of the Common Reporting Standard (CRS) for the automatic exchange of financial account information. This international alignment is expected to help curb base erosion and profit shifting (BEPS) by multinational companies operating in Eswatini.
Recent statistics show a positive trend in tax compliance: the ERS reported a 10% year-on-year increase in filing rates among registered taxpayers in 2023, and the agency projects further improvement as e-filing and taxpayer education campaigns are intensified in 2025. The government estimates that the upcoming reforms could raise tax revenues by 1.5-2% of GDP over the next three years, supporting fiscal consolidation and investment in public services (Ministry of Finance).
- Updated Income Tax Order with anti-evasion measures
- Refined VAT regime and digital compliance tools
- Adoption of international reporting standards (CRS)
- Projected 1.5-2% GDP revenue increase by 2027
The outlook for Eswatini’s tax system in 2025 and beyond is one of increased transparency, efficiency, and alignment with global best practices, positioning the country for stronger fiscal sustainability.
Corporate Taxation: New Rates and Compliance Requirements
In 2025, Eswatini’s corporate tax landscape is characterized by ongoing reforms aimed at enhancing fiscal sustainability, strengthening compliance, and aligning with international tax standards. The Income Tax Order, 1975 (as amended) remains the principal legislation governing corporate taxation, but recent years have seen targeted amendments and updated guidelines reflecting both domestic priorities and global tax trends.
The standard corporate income tax rate in Eswatini remains at 27.5% for resident companies, with non-resident companies taxed at 33%, according to the latest guidance from the Eswatini Revenue Service. Small businesses benefit from a preferential rate under the Small Business Tax regime, which is based on turnover thresholds rather than net income. There is no branch profits tax, but withholding taxes apply to dividends (10%), royalties (15%), and interest (10%) paid to non-residents.
Recent years have seen increased emphasis on compliance and tax administration. The Eswatini Revenue Service (ERS) has introduced digital platforms for tax registration, filing, and payment, with mandatory e-filing for corporate taxpayers. Enhanced Know Your Customer (KYC) procedures, stricter documentation requirements for transfer pricing, and risk-based audit selection have also been implemented. The ERS now requires all large and medium taxpayers to submit audited financial statements and maintain up-to-date tax clearance certificates for participation in government contracts or procurement.
Efforts to combat base erosion and profit shifting (BEPS) have led to closer scrutiny of cross-border transactions and related-party dealings. The introduction of transfer pricing guidelines, based on OECD principles, is expected by 2025, as Eswatini aligns with regional standards under the Southern African Development Community (SADC) tax harmonization agenda. The ERS has signaled that new documentation and reporting requirements for multinational enterprises will be phased in over the next two years.
Key statistics from the Eswatini Revenue Service show corporate income tax collections accounted for approximately 16% of total tax revenue in the most recent fiscal year, with a steady increase in registered corporate taxpayers. Non-compliance remains a challenge, particularly among small and medium enterprises, prompting expanded taxpayer education and targeted enforcement.
Looking forward, Eswatini’s tax authorities are expected to continue modernizing the tax system, with a focus on digitalization, broadening the tax base, and introducing anti-avoidance measures. Businesses operating in Eswatini should monitor regulatory updates and ensure robust internal controls to maintain compliance amid evolving requirements.
Personal Income Tax: Thresholds, Deductions, and Penalties
Eswatini’s personal income tax regime is governed by the Income Tax Order, 1975 (as amended), with oversight by the Eswatini Revenue Service. For the 2024/2025 tax year, personal income tax is levied on a progressive scale. The tax thresholds are as follows: the first E50,000 of annual income is exempt from tax, with subsequent income taxed at incremental rates—20% for income above E50,000 up to E75,000; 25% for income between E75,001 and E100,000; and 30% for income exceeding E100,000 per annum. These rates and thresholds are subject to periodic review in the annual national budget, and any adjustments are published by the Ministry of Finance.
Taxpayers are eligible for certain deductions. Mandatory pension fund contributions, medical aid contributions (subject to statutory limits), and donations to approved charities can be deducted from taxable income. Additionally, employment expenses directly related to earning income may be claimed if substantiated. The Eswatini Revenue Service provides annual guidance on allowable deductions and documentation requirements.
Employers in Eswatini are required to operate Pay-As-You-Earn (PAYE) systems, deducting tax at source and remitting it monthly to the Revenue Service. Individual taxpayers with other sources of income must file annual tax returns by the deadline, typically at the end of June each year. The revenue authority has enhanced its compliance systems through digital platforms, and from 2024 onward, e-filing is strongly encouraged for efficiency and transparency.
Penalties for non-compliance are substantial. Failure to submit returns by the due date attracts a penalty of E100 per month or part thereof, up to a maximum of E1,000. Late payment of tax results in a penalty of 10% of the outstanding amount, plus interest at the prevailing prime lending rate. The Eswatini Revenue Service is actively strengthening enforcement, with audits and compliance campaigns increasing in frequency.
Looking ahead, Eswatini’s tax authorities are expected to continue focusing on broadening the tax base and improving compliance, particularly by leveraging technology and tightening audit processes. No major changes to personal income tax rates or thresholds have been announced for 2025, but the government’s medium-term fiscal strategy indicates ongoing review to ensure equitable taxation and improved revenue mobilization.
Value Added Tax (VAT) and Indirect Taxes: What’s Changing?
Eswatini’s Value Added Tax (VAT) regime, a cornerstone of the country’s indirect tax system, continues to evolve in response to fiscal needs and regional harmonization efforts. The VAT Act, first enacted in 2011, establishes the legal framework for VAT, with oversight by the Eswatini Revenue Service (ERS). VAT is levied at a standard rate of 15%, with specific goods and services either zero-rated or exempt as detailed in the legislation.
Recent years have seen a focus on improving compliance, revenue collection, and modernization of tax administration. The ERS has rolled out digital platforms to facilitate online VAT registration, submission, and payment, aiming to reduce compliance costs and increase taxpayer convenience. The number of registered VAT vendors has steadily increased, with the ERS reporting over 6,000 active VAT-registered businesses as of 2023. VAT continues to be a primary source of government revenue, accounting for approximately 30% of total tax collections in the 2023/24 fiscal year, as indicated in the national budget releases from the Government of Eswatini.
Key legislative developments for 2025 include proposed amendments to further align VAT rules with the Southern African Customs Union (SACU) protocols and to close loopholes related to digital services, cross-border transactions, and e-commerce. Draft amendments, currently under stakeholder consultation, are expected to clarify the VAT treatment of digital supplies, introduce more robust place-of-supply rules, and potentially expand the reverse charge mechanism for non-resident service providers. The ERS has signaled that these changes are intended to counteract base erosion and profit shifting, as well as to enhance domestic resource mobilization.
Indirect taxes beyond VAT—such as fuel levies, excise duties, and customs tariffs—remain significant, particularly given Eswatini’s SACU membership. Policy reviews are underway to assess the efficiency and competitiveness of these taxes, with a view toward simplifying structures and minimizing distortionary impacts on trade and investment.
Looking ahead to 2025 and beyond, the outlook for VAT and indirect tax law in Eswatini includes: increased digitalization of compliance processes, enhanced enforcement against non-compliance, and the potential for rate or scope adjustments in response to fiscal pressures or regional harmonization. Businesses operating in Eswatini should anticipate heightened scrutiny of VAT filings, particularly regarding cross-border digital transactions, and stay abreast of legislative updates as the ERS continues to modernize the tax environment.
Tax Compliance and Enforcement: Strategies and Penalties
Tax compliance and enforcement in Eswatini are governed by a framework that seeks to ensure the efficient collection of revenue, curb tax evasion, and promote voluntary compliance among individuals and businesses. The primary legislative instruments are the Income Tax Order, 1975 (as amended), and the Value Added Tax Act, 2011, which establish the powers of the Eswatini Revenue Authority (SRA) as the principal enforcement agency.
In recent years, the SRA has intensified its compliance strategies, reflecting government priorities to expand the tax base and improve fiscal stability. Compliance initiatives for 2025 continue to focus on risk-based audits, taxpayer education, and the digitization of tax processes. The SRA’s e-filing system, introduced in previous years, is now widely used for filing returns and making payments, streamlining compliance for both individual and corporate taxpayers. Targeted compliance campaigns address sectors with historically low compliance, such as small businesses and the informal sector.
To enhance enforcement, the SRA has increased its audit activities, utilizing data analytics and third-party information to identify discrepancies and non-compliance. In 2023, the SRA audited over 1,200 taxpayers, resulting in the recovery of SZL 210 million in additional tax assessments. These efforts are expected to intensify in 2025 as the SRA deploys upgraded data matching and risk assessment tools (Eswatini Revenue Authority).
Penalties for non-compliance are set out in the relevant legislation. For late filing or payment of income tax, penalties include a fine of 10% of the outstanding tax and interest at the prevailing rate for each month of default. VAT-related offences can attract even higher penalties, including a fixed fine and up to three years’ imprisonment for serious cases such as fraud or deliberate evasion. The SRA also has powers to garnish bank accounts and seize assets where taxes remain unpaid (Eswatini Revenue Authority).
Looking ahead, the compliance outlook for 2025 and the coming years is shaped by the government’s commitment to fiscal consolidation and public sector reform. The SRA is expected to implement further digital transformation, expand third-party data sharing (including with banks and utility companies), and enhance taxpayer support services. The focus will remain on balancing enforcement with facilitation, encouraging voluntary compliance while maintaining robust deterrents against non-compliance. As Eswatini seeks to meet its revenue targets and align with international tax standards, compliance and enforcement will remain at the forefront of tax administration reforms.
Recent Statistics: Revenue Collection and Economic Impact
Eswatini’s tax law framework, primarily administered by the Eswatini Revenue Service (ERS), continues to play a crucial role in supporting government finances and socio-economic development. In the fiscal year 2023/24, total revenue collections, which include both tax and non-tax revenue, reached approximately SZL 20.9 billion, representing a significant proportion of the country’s GDP. Tax revenue alone accounted for around SZL 9.7 billion, with Value Added Tax (VAT), Corporate Income Tax, and Pay-As-You-Earn (PAYE) being the leading contributors. VAT accounted for approximately 33%, while PAYE and Corporate Taxes contributed 28% and 19%, respectively, to the overall tax revenue pool.
The ERS has reported consistent year-on-year growth in revenue collection, driven by enhanced compliance measures, digitalization of tax processes, and targeted enforcement against tax evasion. Compliance rates for major taxes, such as VAT and PAYE, now exceed 80%, reflecting increased taxpayer engagement and improved administrative efficiency. As indicated in the ERS Annual Report 2023, these improvements are attributed to ongoing taxpayer education initiatives and the rollout of e-filing platforms, which have simplified the filing and payment procedures for both individuals and corporate entities.
The economic impact of these collections is significant. Tax revenues fund essential public services, infrastructure projects, and initiatives aimed at economic diversification. However, Eswatini remains sensitive to regional economic shifts, particularly changes in receipts from the Southern African Customs Union (SACU), which traditionally constitutes a large portion of government revenue. For the 2024/25 budget, SACU receipts are projected to remain stable, but the government continues to emphasize domestic resource mobilization to reduce reliance on external inflows.
Looking ahead to 2025 and the subsequent years, revenue collection is expected to maintain a positive trajectory, bolstered by ongoing modernization of the tax system and anticipated economic recovery post-pandemic. The ERS aims to further widen the tax base by formalizing segments of the informal economy and enhancing data analytics for risk-based compliance. These measures are expected to increase revenue efficiency and support the government’s medium-term fiscal objectives, thus reinforcing the central role of tax law and administration in Eswatini’s economic outlook.
Future Outlook: Predicted Tax Reforms Through 2030
Looking ahead to 2030, Eswatini’s tax law landscape is poised for significant transformation, driven by fiscal modernization efforts, regional integration, and increasing demands for revenue mobilization. The government has recognized the need to broaden the tax base, enhance compliance, and align with international standards, particularly as Southern African Customs Union (SACU) revenues—historically a major source of government income—face volatility and long-term decline.
The Ministry of Finance has outlined several reform priorities. Central to these are plans to implement an e-filing system and expand digital tax administration, aiming to improve efficiency and taxpayer compliance. The Eswatini Revenue Service has already piloted online VAT submissions and is expected to extend these capabilities to corporate and personal income taxes by 2025–2026. This digital transition is intended to reduce compliance costs and minimize opportunities for tax evasion.
Another anticipated reform is the review of Value Added Tax (VAT) policies. Currently set at 15%, VAT is a critical revenue source. However, the government is considering rate adjustments and a reassessment of exemptions to increase collections without unduly burdening low-income populations. The Eswatini Revenue Service has reported that VAT accounted for approximately 38% of domestic tax revenue in recent years, signaling its centrality to fiscal planning.
Corporate tax reforms are also on the horizon, especially regarding the tax treatment of multinational enterprises and the adoption of Base Erosion and Profit Shifting (BEPS) measures. Eswatini has engaged with the OECD and regional partners to develop frameworks that would address profit shifting and enhance transparency, aligning with global tax governance trends.
From a compliance perspective, the Eswatini Revenue Service is intensifying audit activities and sector-specific reviews, particularly in high-risk industries such as construction, retail, and mining. The aim is to boost the tax-to-GDP ratio, which has hovered around 13–14%, to meet or exceed the Southern African Development Community (SADC) benchmark of 20%.
Overall, Eswatini’s future tax law reforms are expected to focus on digitalization, broadening the tax base, aligning with international standards, and strengthening enforcement. These shifts are crucial for achieving fiscal sustainability, supporting social spending, and fostering economic resilience through 2030.
Official Resources and Guidance for Staying Compliant
Staying compliant with tax law in Eswatini requires consistent engagement with official resources and adherence to procedural guidance issued by competent authorities. The Eswatini Revenue Service (ERS) serves as the primary body overseeing tax administration and enforcement in the Kingdom. The ERS provides extensive guidance on registration, filing obligations, payment methods, and dispute resolution through its official website and service centers. Taxpayers are expected to familiarize themselves with key legislation, most notably the Income Tax Order, 1975 (as amended), Value Added Tax Act, and related statutory instruments, all of which are accessible directly from the ERS’s legislative library.
- Registration and Filing: Businesses and individuals must register for relevant taxes, including income tax and VAT, as stipulated by ERS guidelines. The ERS now facilitates online tax registration, filing, and payments via its e-Services portal, streamlining compliance and reducing administrative burdens.
- Taxpayer Education: The ERS regularly updates its taxpayer education portal with publications, FAQs, and newsletters outlining compliance obligations, recent amendments, and best practices. In 2024, the ERS intensified outreach programs to prepare taxpayers for anticipated amendments in 2025, focusing on digital tax administration and enhanced enforcement measures.
- Guidance on Audits and Disputes: The ERS provides step-by-step guidance on its tax audits and investigations page, detailing taxpayer rights, audit procedures, and channels for dispute resolution or appeals. Recent communications emphasize the importance of maintaining accurate records and timely responses to audit queries.
- Professional Support: The Eswatini Chamber of Commerce and Industry and the Institute of Chartered Accountants of Eswatini offer directories of qualified tax practitioners and accountants, who are instrumental in navigating complex compliance matters and representing clients before tax authorities.
Looking ahead, compliance will increasingly hinge on leveraging digital platforms, responding proactively to legislative amendments, and engaging with official guidance as tax administration modernizes. Taxpayers are advised to monitor updates directly from the ERS and relevant professional bodies to remain aligned with evolving requirements through 2025 and beyond.
