Exports and Imports
Eswatini's main exports are manufactured goods (particularly textiles and apparel), sugar, and soft drinks. In 2023, exports were valued around $5.2 billion, while imports reached an estimated $6.7 billion. This trade deficit is partially offset by inflows from customs duties collected within the Southern African Customs Union (SACU).
Balance of Trade
Eswatini experiences a persistent trade deficit, with imports consistently exceeding exports. Revenue from SACU membership helps mitigate this gap, but the reliance on imports for essential goods and raw materials is a concern.
Infrastructure Development
Eswatini's road network totals around 3,800 kilometers (2,361 miles) as of a 2024 estimate, with a mix of paved and unpaved roads. The government is prioritizing infrastructure projects, including road upgrades- aiming for in Japanese), bridge construction, and improvements to the national electricity grid. However, funding limitations and geographic challenges can hinder progress.
Fiscal Policy
The Swazi government prioritizes spending on social programs like education and healthcare. However, this focus, coupled with a narrow tax base, contributes to a budget deficit. Efforts to diversify the economy and broaden the tax base are ongoing to generate more sustainable revenue (2024 World Bank reports indicate progress in this area).
Monetary Policy
Eswatini, a member of the Common Monetary Area (CMA) with South Africa, Lesotho, and Namibia, uses the South African Rand (ZAR) as its official currency. The Central Bank of Swaziland (CBS) has limited independent monetary policy options due to the CMA membership. However, the CBS focuses on maintaining financial stability and promoting financial inclusion within Eswatini (recent initiatives include mobile banking solutions).
Trade Agreements
Eswatini benefits from duty-free access to major markets like the United States and the European Union through trade agreements like AGOA (African Growth and Opportunity Act) and preferential access to the EU for sugar exports. These agreements have boosted Eswatini's export-oriented manufacturing sector. The kingdom also actively participates in regional trade agreements like SACU, which promotes trade among member states.
Environmental Regulations
Eswatini has environmental protection laws and regulations in place (recent updates include stricter waste management regulations in 2023). However, enforcement can be weak due to limited resources. Soil erosion, water pollution, and deforestation are environmental concerns. The government recognizes the need for environmental sustainability and is taking steps to address these challenges, such as promoting reforestation initiatives (planting targets for 2024 have been announced). International cooperation plays a role in supporting these efforts.
Tax System in Swaziland
Capital gains tax: Capital gains are taxed at the same rate as ordinary income in Eswatini. The progressive tax rate for individuals ranges from 0% to 35%, depending on income level.
Corporate tax rate: The standard corporate tax rate in Eswatini is 27.5%. However, there are variations: (i) Special Economic Zones (SEZs): Businesses operating in designated SEZs may benefit from reduced corporate tax rates or tax holidays to attract foreign investment. Specific rates and qualification criteria depend on the zone and the investment.(ii) Incentives: The government may offer tax incentives for businesses in strategic sectors deemed crucial for development (e.g., renewable energy, manufacturing). These incentives can take the form of lower tax rates, tax deductions, or tax holidays.
Sales tax: Eswatini has a Value Added Tax (VAT) applied to most goods and services at a standard rate of 14%. Certain essential goods (e.g., basic foodstuffs) may be exempt from VAT.
Property tax: Property taxes in Eswatini are relatively low. Rates typically range from 0.5% to 1.0% of the property's assessed value per year, depending on location and type (residential vs. commercial).
Payroll tax: Eswatini has a social security system funded by both employers and employees. The total contribution rate is around 3.5% of an employee's salary (employer: 2%, employee: 1.5%), providing benefits like pensions.
Tax deductions and credits: Eswatini offers some tax deductions and credits to reduce tax liability for individuals and businesses. These can include deductions for: (i) Business expenses (ii)Medical expenses (with limitations) (iii) Charitable contributions (iv) Pension contributions.
Tax compliance: Tax compliance in Eswatini is improving as the government implements stricter regulations and utilizes technology for better tax administration (e.g., online tax filing systems).
Tax burden: The overall tax burden in Eswatini is considered moderate for individuals and businesses compared to some developed economies. The government is focusing on broadening the tax base and improving tax collection efficiency to generate sustainable revenue for social programs and development projects.
19 Nov 2024
06 Dec 2024
Tenders by Country