Ezulwini – Tax compliance has become mandatory for all procurement transactions exceeding E20 000, according to reports by Eswatini Observer.
The Eswatini Revenue Service announced the directive through a public notice that takes immediate effect and applies to both the public and private sectors. The requirement covers suppliers tendering to provide goods or services to government departments, local authorities, parastatals, private companies and other institutions operating within the Kingdom.
Reports by Eswatini Observer state that the measure is issued in terms of the Income Tax Compliance Certificate Regulations 2022 under Legal Notice 484. By lowering the threshold for mandatory compliance, the ERS is seeking to expand oversight of economic activity and tighten accountability in procurement processes.
A Tax Compliance Certificate serves as official proof that a taxpayer is fully compliant with tax obligations, including Income Tax and Value Added Tax. The ERS indicated that responsibility rests with both the supplier and the procuring entity.
Under Section 66(2)(b) of the Income Tax Order, any institution that fails to demand a valid Tax Compliance Certificate before awarding a contract commits a criminal offence. Such conduct may be viewed as assisting tax evasion, exposing the procuring entity to possible prosecution. To reduce this risk, the ERS has advised organisations to carry out bulk verification of their supplier databases at least quarterly.
To obtain a Tax Compliance Certificate, a taxpayer’s affairs must be fully up to date across all tax types. This includes the timely submission of all required tax returns and the full settlement of outstanding tax liabilities, penalties and interest.
Registration with the ERS for a Taxpayer Identification Number is the first requirement. Companies must submit a certified copy of the Certificate of Incorporation, the relevant registration form, a valid trading licence and details of an appointed Public Officer. Individuals are required to provide a national identity document or, in the case of non citizens, a passport, together with proof of physical address such as a lease agreement or utility bill.
Compliance also depends on the timely submission of tax schedules. VAT registered businesses are required to submit mandatory line by line VAT schedules through the TaxFase platform. Employers must also be fully compliant with Pay As You Earn remittances and annual income tax returns.
ERS Commissioner General Brightwell Nkambule acknowledged possible administrative bottlenecks and pointed to digital systems introduced to ease compliance. He said the ERS has implemented a self service electronic platform that allows taxpayers to generate Tax Compliance Certificates at any time, seven days a week.
The system is intended to reduce delays in procurement processes and remove paperwork barriers for compliant businesses. Newly issued certificates now feature a QR code for instant verification, replacing the previous manual ink stamp system and offering a more secure way for procuring entities to conduct due diligence.
Discussion about this post