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Presumptive Tax

What is Presumptive Tax?

Presumptive tax is a new tax regime that came with the 2023 Income Tax Order Amendments that came to effect on the 1st of July 2024. Presumptive tax is a form of income tax which is calculated on a business’ turnover; this form of tax relates to small business.

Who is a small business?

Any taxpayer who is ordinarily resident or carrying on business in Eswatini whose turnover, derived on carrying on of that business is less than five hundred thousand Emalangeni (E500,000) in a year of assessment.

What is turnover?

The amount shown in the accounts of a taxpayer as the gross proceeds derived in the carrying on of business during the year of assessment including the gross proceeds arising from the disposal of trading stock and business assets, without the deduction for expenditure or losses incurred in deriving that amount

Who qualifies as a small business for presumptive tax?

A natural person (or the deceased or insolvent estate of a natural person that was a registered small business at the time of death or insolvency) or a company where the turnover of that person for the year of assessment is below E500,000 threshold.

Who does not qualify for presumptive tax?

A person ordinarily resident or carrying on business in Eswatini who is a professional or who receives investment income.

Investment Income

Any income in the form of annuities, dividends, interest, rental derived in respect of immovable property leased for commercial purposes, royalties, or income of a similar nature; or

Any proceeds derived from the disposal of financial instruments.

Professional Services

Occupations in the tertiary sector of the economy requiring special training in the arts or sciences. Such services shall be of a technical or consultancy nature. This includes but is not limited to the field of accounting, actuarial science, architecture, auctioneering, auditing, broadcasting, consulting, draftsmanship, education, engineering, financial service broking, health, information technology, journalism, law, management, real estate broking, research, sport, surveying, translation, valuation or veterinary science

Tax Obligations of a Small Business under Presumptive Tax

Registration

Record keeping

Provisional Tax Payment

Submission of annual income tax return

Registration

A qualifying small business shall be registered before the beginning of a year of assessment or such later date during that year of assessment or such later date as the Commissioner may prescribe

Within two months from the date of commencement of business activities, in the case of a business that commenced business activities during a year of assessment or with effect from the beginning of that year of assessment

Where To Register?

To register for presumptive tax:

Visit the nearest ERS Service Centre and submit the supporting documents listed below or,

Website; click here to attach required registration documents,

Mobile Phone, Dial: *4050#.

Documents Required for Registration

Companies:

Certificate of Incorporation

Form J

Trading license

Proof of banking details (recent bank confirmation letter or recent bank statement)

Proof of business address (current utility bill, lease agreement)

Directors’ ID copies

Individuals/Sole Traders:

ID Copy

Proof of business address (current utility bill, lease agreement)

Copy of trading license

Existing small businesses

Clients who are already registered (who have TINs) who qualify for presumptive tax do not need to apply for registration, the ERS will send a notification that they have been changed to presumptive tax regime.

New Registrants

Small businesses that have not registered with ERS (i.e businesses without a TIN) can use one of the above options to apply for registration:

Record Keeping

Basic records are to be kept which are a simple notebook or cashbook, fixed asset register, register of daily sales (or service rendered) and spreadsheet where payments are recorder daily.

Provisional Tax Payment

A small business under presumptive tax shall be liable to pay an estimated provisional tax annually in four instalments as per the below table.

An estimate of turnover for each year of assessment shall be submitted and shall include a statement of the actual turnover of the taxpayer for the previous year of assessment

Each payment of provisional tax shall be credited against the tax payable by the taxpayer in the year of assessment to which it relates

Date DueAmount of Provisional Tax to have been paid

1st Instalment

30 September

25% of the total estimated tax

2nd Instalment

31 December

50% of the total estimated tax

3rd Instalment

31 March

75% of the total estimated tax

4th Instalment

30 June

100% of the total estimated tax

Annual Income Tax Return

An income tax return shall be submitted at the end of the year of assessment

Effective date:

Presumptive tax is effective from the year of assessment commencing on 01 July 2024. This means a small business under the presumptive tax regime will file their first annual income tax return after 30 June 2025.

Applicable Tax Rates are shown below:

Gross TurnoverRate of Tax

Where the gross turnover of the taxpayer does not exceed E50 000.00

0%

Where the gross turnover of the taxpayer exceeds E50 000.00 but less than E500 000.00

1.75% of the total amount

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About ERS

The Eswatini Revenue Service (ERS) is a semi-autonomous revenue administration agency, established through the Revenue Authority Act No. 1 of 2008. It operates within the broad framework of Government but outside of the civil service.



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