By Mbono Mdluli
MBABANE – The fact that Eswatini is influenced by South Africa on matters such as value-added tax (VAT) does not mean the country has lost its sovereignty or independence.
This was emphasized by Minister of Finance Neal Rijkenberg on May 6, 2025, during his Finance In Focus programme. Rijkenberg stressed that Eswatini remains independent in many areas. He cited examples, particularly in taxation, where Eswatini’s system differs from that of South Africa.
For instance, Eswatini’s corporate tax is slightly lower. According to data from the South African Revenue Service (SARS) shared by Trading Economics, South Africa’s corporate tax rate stands at 27%. Historically, it has averaged 31.86% from 2001 to 2025, peaking at 37.8% in 2002 and hitting a record low of 27% in 2023.
In contrast, PwC reports that new tax legislation effective July 1, 2024, reduced Eswatini’s corporate tax rate from 27.5% to 25%. Additionally, Eswatini has introduced a presumptive tax for turnovers of E500,000 and below, and fixed withholding taxes on non-residents at 15%.
Meanwhile, South Africa offers a turnover-based presumptive tax for very small companies, with turnovers under R1 million per year, at rates ranging from 0% to 3%, depending on the turnover level.
Minister Rijkenberg explained that Eswatini aligns with South Africa on VAT to ensure convenience for local traders, given that many goods sold in Eswatini are imported from South Africa.
He further noted that about 70% of goods produced in Eswatini are either sold to South Africa or pass through the country. Additionally, Eswatini is part of the Common Monetary Area (CMA), along with South Africa, Lesotho, and Namibia, where currencies are pegged to the South African Rand to facilitate smooth trade among member states.
