…. Legislators warn runaway ERS fines are crippling businesses as Amendment Bill passes with changes
BY MFANUFIKILE KHATHWANE
LOBAMBA – Members of Parliament (MPs) have intensified calls for the Eswatini Revenue Service (ERS) to introduce a ceiling on tax penalties, warning that unchecked daily fines are pushing businesses into financial distress and threatening economic growth.
The appeal came during Wednesday’s debate on the Eswatini Revenue Service (Amendment) Bill, 2026, where lawmakers scrutinised proposed reforms to the country’s tax penalty regime before the Bill was eventually passed with amendments.
At the centre of the debate was the daily penalty imposed on taxpayers who fail to submit their tax returns on time. While the original Bill proposed reducing the penalty to E25 per day, the Parliamentary Finance Committee recommended increasing it to E50, prompting spirited debate among legislators.
Several MPs argued that although tax compliance is essential, penalties should not become so excessive that they destroy businesses already facing economic challenges.
MPs said Parliament has a responsibility to strike a balance between enforcing compliance and creating a business environment that supports investment, entrepreneurship and job creation.
Mbabane East MP Welcome Dlamini questioned why Parliament was considering a higher daily penalty than the amount originally proposed by the Minister of Finance. He called for the existing E200 daily penalty to be capped, saying some businesses had accumulated penalties exceeding E120 000.
Mayiwane MP Sicelo Dlamini said many entrepreneurs were paying far more in penalties than in actual tax liabilities. He noted that a business owing ERS E500 000 could ultimately pay more than E2 million because of accumulated penalties.
He proposed introducing a statutory ceiling, suggesting that taxpayers owing less than E500 000 should not face penalties exceeding between E10 000 and E15 000.
Ngudzeni MP Charles Ndlovu also supported placing a limit on tax penalties, saying charges should not continue increasing indefinitely.
Responding to the debate, Lobamba Lomdzala MP Marwick Khumalo explained that the Finance Committee recommended increasing the proposed daily penalty from E25 to E50 after concluding that the original amount would not sufficiently encourage compliance.
He clarified that the E200 daily charge already exists in law and is a penalty for failing to submit tax returns, not a tax itself. He also reminded businesses that they are required to submit returns even when they have no trading activity by filing nil returns.
The House of Assembly later passed the Eswatini Revenue Service (Amendment) Bill, 2026, with amendments, while MPs emphasised the need for continued reforms that strengthen tax compliance without placing excessive pressure on businesses.
