Liyandza - Engineering and Manufacturing investment opportunity in Swaziland
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Tax Benefits Offered to the Manufacturing Industry

Swaziland’s Income Tax Order provides various incentives to investors wishing to establish manufacturing operations within the country. The purpose of these tax incentives is to remove the excess tax burden and in so doing, encourage foreign direct investment into the country. A summary of the incentives that a manufacturing firm may receive, is given below.

1. Corporate Tax
The Corporate tax rate in Swaziland is 27.5%. However, through the Swaziland Developmental Approval Order, a concessional rate may be granted for a period of up to ten years (at the discretion of the Minister of Finance) to a new business which has satisfied the conditions listed in Swaziland Tax Guide under Annexure B. The corporate tax in such cases is a rate of up to 10%.

In addition, the applicant shall also have an exemption from withholding tax on dividends during the 10 years

2. Machinery initial allowance
In respect of machinery or plant bought by the taxpayer for the first time for use by the taxpayer in the process of manufacture; a Machinery Initial Allowance may be granted at a rate of 50% of the total cost of the machinery. This allowance however does not include motor vehicles intended and adapted for use on roads.

3. Infrastructural initial allowance
In respect of infrastructural machinery, plant or facilities, including transmission equipment, lines and pipes brought into use by the taxpayer for the first time, used in the provision of infrastructural services; an Infrastructural Allowance may be granted at a rate of 50% of the cost incurred by the taxpayer.

Infrastructural services include provision of electricity, water, sewer, rail facilities and telecommunication by a parastatal or statutory corporation whose main business is to provide such services.

4. Building Initial allowance
In respect of building other than hotel and improvements if such building is wholly/mainly used for the purpose of housing machinery or plant for the year of assessment during which the building is first used; a Building Initial Allowance may be granted, at a rate of 50% of the actual cost of the building. A four percent(4%) annual allowance on cost remaining after initial allowance may also be considered.

5. Immovable property allowance
In respect of a taxpayers engaged in business of manufacture, for an expenditure for the erection of any dwelling to be occupied solely by his staff for the purpose of his own business; an Immovable Property Allowance may be granted at a rate of 20% during the first year the expenditure is incurred and 10%for the next succeeding years.

This allowance shall not exceed E12 000.00 for the first year and E6 000 for the succeeding eight years and the expenditure does not include the cost of the land on which dwellings are erected.

Such dwellings should exclusively be occupied by persons or households who are the taxpayer’s employees (other than employees engaged in managerial or supervisory capacity)

The above concessions are applicable to approved new investments, which in their nature must be a developmental enterprise in manufacturing, mining, international services and tourism sectors.

See Tax Guide for Investors (Adobe PDF Reader Required)
See Tax Incentives for Investors (Adobe PDF Reader Required)

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