Mbabane – Eswatini Revenue Service (ERS) has revealed that the country’s staggering E4.4 billion tax deficit in the current financial year is largely owed by the retail, wholesale and construction sectors with the retail industry topping the list of defaulters.
Speaking on Eswatini Broadcasting and Information Service (EBIS’s) Letishisako programme, ERS Director of Legal Operations, Henry Sukati, said the authority has faced major challenges in collecting taxes, particularly Value Added Tax (VAT), from retail businesses. He explained that the difficulty stems from the absence of a system capable of tracking how much VAT each shop collects from consumers.
“Every consumer pays VAT when making purchases, but most businesses use that money for other purposes because there is currently no system to track these transactions,” Sukati said.
He noted that many retailers under-declare the VAT they collect, resulting in massive revenue losses for the state. However, Sukati assured the public that this will soon change as ERS is developing a new digital tracking system that will monitor every sale made in shops across the country.
“Once the new system is operational, ERS will know exactly how much VAT each shop has collected every month, removing the reliance on self-declarations, which have proven ineffective due to dishonesty from some business owners,” he added.
The planned system is expected to improve compliance and transparency within the retail sector, which has long been a challenge for tax administrators. Sukati also urged businesses to come forward under the ERS’s Voluntary Disclosure Programme, which allows retailers to report and settle their tax defaults without facing harsh penalties.
“We encourage all retail businesses to visit ERS offices and disclose the amounts they owe. This is their chance to correct past mistakes before the new system comes into effect,” Sukati said.
The ERS revealed that Eswatini has failed to collect over E4.4 billion in taxes in the 2024/2025, a shortfall that threatens government revenue targets and public service funding.
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