Eswatini MPs Call for Taxation Over Fines for Foreign Traders

In a recent parliamentary discussion, Eswatini MPs suggested that foreign traders operating on Swazi Nation Land (SNL) should be taxed instead of being fined. The proposal was made by Lobamba Lomdzala MP Marwick Khumalo, who argued that fines, which can reach up to E7 000, do not significantly contribute to the economy. According to Khumalo, the government should devise means to collect tax from these foreign investors, which would be a more meaningful contribution to the economy.

The debate was sparked by concerns that some foreign investors, such as companies like Kellogg’s, seem to benefit greatly from the country while locals receive little in return. Nhlambeni MP Manzi Zwane expressed concerns that these companies enjoy long tax holidays, which could result in huge losses if they decide to shut down business at the end of their tax holidays. Zwane suggested that foreign companies should make significant investments in local communities while operating in the country.

Several MPs, including Zombodze Emuva MP Ntando Mkhonta, Dvokodvweni MP Sifiso Shabalala, and Ndzingeni MP Gcina Magagula, shared similar sentiments with Zwane. They questioned the criteria used to determine the amount of money each trader is charged, citing inconsistencies in the fines imposed. Shabalala warned that the approach being used to tackle the issue could lead to hostility and potentially uncontrollable situations.

Shabalala also expressed concern about the conduct of inspections by officers from the ministry of commerce, industry and trade. He stated that when officers lock up shops during inspections, it leads to stock spoilage and losses for investors. This, he said, could create bad blood between locals and foreigners, similar to the situation in neighbouring South Africa.

Minister of Commerce, Industry and Trade, Manqoba Khumalo, responded to the concerns, stating that routine inspections are conducted based on existing policies. He explained that any company found to be non-compliant is charged fines as per the Trading Licences Act of 1975. Khumalo emphasized that the ministry is intensifying compliance with the law.

The law states that foreigners are not allowed to operate on SNL, but inspections aim to enforce compliance. Khumalo’s comments were made through Health Minister Mduduzi Matsebula, as he was not available for direct comment. The minister’s response highlights the government’s efforts to regulate foreign trading on SNL.

The proposal to tax foreign traders instead of fining them aims to ensure that these investors contribute meaningfully to the economy. The debate highlights the need for a more effective strategy to regulate foreign trading on SNL and ensure that the country benefits from their operations.

Key points

• Eswatini MPs propose taxing foreign traders on Swazi Nation Land instead of fining them.
• The fines, which can reach up to E7 000, are seen as insignificant contributions to the economy.
• The government aims to intensify compliance with the Trading Licences Act of 1975.