By Delisa Magagula
The Eswatini Revenue Service (ERS) has unveiled an assessment of the country’s tax compliance landscape, revealing a persistent total tax gap estimated at E4.4 billion.
The data, presented by Minister for Finance, Neal Rijkenberg, specifically identifies the Wholesale and Retail sector as the single most challenging area, contributing over a quarter of the entire shortfall.
This briefing was convened to unpack the ERS Compliance Improvement Plan (CIP), with Minister Rijkenberg outlining key compliance focus areas and the treatments the ERS will implement to enhance taxpayer compliance.
Rijkenberg also highlighted important dates for the 2025 Income Tax Filing Season.
The ERS report specifies that the total cumulative tax gap, factoring in multiple tax types, stands at E4.302 billion, which aligns with the E4.4 billion figure cited by the ERS.
This deficit includes gaps in Value Added Tax (VAT), Pay As You Earn (PAYE), Corporate Income Tax (CIT), and Individual Income Tax (PIT). The figures presented show that VAT alone accounts for an estimated E1.359 billion of the total gap, while CIT contributes E1.131 billion.
The PIT gap is recorded at E1.196 billion, with PAYE accounting for the remainder at E615 million.
“The Total Tax Gap figures are derived from sectoral estimates of non-compliance across the economy. Manufacturing, Construction, and other economic sectors all contribute to the shortfall, but the data places the Wholesale and Retail sector distinctly ahead in terms of absolute contribution to the non-compliance rate across all tax heads,” said the Minister.
He further said, the sector-specific breakdown isolates the Wholesale and Retail industry as the source of the largest total tax gap.
According to the ERS report, the sector’s total non-compliance amounts to E1.133 billion. This figure represents approximately 26.3% of the total E4.302 billion tax gap across all tax types and sectors.
The ERS data presented at the briefing explicitly highlighted the Wholesale and Retail sector as the most challenging especially VAT.
“The E1.133 billion shortfall for Wholesale and Retail is primarily driven by gaps in VAT and Corporate Income Tax. The sector’s estimated VAT Gap is reported at E603 million, and its CIT Gap estimate stands at E417 million. These two tax types alone account for over E1 billion of the sector’s total non-compliance,” reads the report.
For comparison, the Manufacturing sector is the next largest contributor to the overall VAT Gap, with an estimate of E305 million.
Meanwhile, the Construction sector’s VAT Gap estimate is E127 million, while all other sectors combined contribute E304 million to the total VAT shortfall of E1.359 billion.
In the realm of Corporate Income Tax, Wholesale and Retail’s E417 million gap also leads the sectoral breakdown. The Manufacturing sector’s CIT gap is E244 million, and the Agriculture sector is listed at E127 million.
Further analysis from the ERS briefing provided insight into compliance levels by segment for the period of April to September 2025.
The data presented covers Business Provisional Tax (BUSPROV), Corporate Income Tax (CORPINC), Pay As You Earn (PAYE), and VAT. While overall compliance rates generally hover above the 80% mark for BUSPROV, CORPINC, and PAYE across segments, the compliance rate for VAT shows a more varied performance.
In the ERS report, it was illustrated that the performance of the VAT segment appears lower than the other three tax types in certain areas, consistent with the substantial VAT Gap estimate across sectors.
The core purpose of the press briefing, as presented by Minister Rijkenberg, was to communicate the measures to be implemented in the new Compliance Improvement Plan (CIP).
“The CIP is designed to address the challenging figures by enhancing taxpayer compliance and focusing treatment efforts on the areas of greatest weakness.
The publication of these specific data points underscores the ERS’s intention to target resources towards the identified high-risk sectors and tax types, notably the E603 million VAT gap within the Wholesale and Retail sector,” he said.
The ERS has stated its primary objective through the briefing is to share this vital information to encourage voluntary compliance ahead of the announced 2025 Income Tax Filing Season deadlines.
