Ezulwini – The Eswatini Revenue Service is inviting taxpayers, tax practitioners, employers and other stakeholders to review and comment on four draft Practice Notes covering key areas of tax administration, ahead of their finalisation.
The notes, which are open for public feedback now, cover the taxation of benefits in kind and certain allowances, interest deductibility, losses carried forward, and retirement fund contributions. All four are set to come into effect on 1 July 2026.
Stakeholders can submit their feedback through an online form at https://forms.office.com/r/tHbqpdeWtM, with ERS saying input will be used to improve the clarity, accuracy and practical application of the notes before they are signed off. 
The Practice Note on benefits in kind, issued under Practice Note No. LEGAL-IT/01/23, sets out how employer-provided benefits are to be valued and included in an employee’s gross income. It covers a wide range of benefits including housing, company vehicles, domestic workers, utilities, educational assistance, soft loans, meals and entertainment, medical contributions, vouchers and credit cards. The note replaces Legal Notice No. 157 of 2007, which is revoked upon its coming into force.
On company vehicles, the note sets out a formula for calculating the taxable benefit based on 20 percent of the market value of the vehicle, adjusted for the number of days it was available for private use during the year of assessment. Employees who receive a fixed car allowance and are required to use their own vehicle for business travel must maintain a detailed logbook recording business mileage, destination and purpose of each trip. Where no records are kept, deemed figures of 6 000 kilometres for business travel and 24 000 kilometres for total mileage apply.
Housing benefits where the employer owns the property are valued using a tiered table based on property size, number of bedrooms and location category, with properties classified as Area A (superb), Area B (good) or Area C (poor). Taxable values in the table have been escalated at ten percent annually for six years to reflect current rental market conditions, with the base figures last reviewed in 2003.
The interest deductibility note, Practice Note No. COM-IT/02/26, limits the amount of interest that companies within a group can deduct to 30 percent of their tax EBITDA for any year of assessment. Banking and insurance companies are exempt from this limitation. Any interest that cannot be deducted in a given year may be carried forward for up to three years, after which any remaining undeducted amount is forfeited.
The losses carried forward note, Practice Note No. COM-IT/01/26, sets out that a loss which has not been fully exhausted after five consecutive years of assessment falls away and cannot be set off against future taxable income. The note also ring-fences losses by activity type, meaning that losses from rental, manufacturing or farming operations generally cannot be offset against income from unrelated business activities. An exception applies to timber plantation farmers, who may carry losses forward until the plantation reaches maturity and is ready for harvest, and to farmers with orchards, who may deduct losses until the orchard becomes productive.
The retirement fund contributions note, Practice Note No. COM-IT/03/26, sets minimum and maximum contribution rates for both employers and employees. Employees must contribute at least five percent and no more than 15 percent of their pensionable salary, with voluntary additional contributions permitted subject to the Commissioner General’s approval. Employers must contribute at a rate equal to, or up to twice, what the employee contributes, subject to a ceiling of 20 percent. Employers who fail to make the required contributions will not qualify for tax relief. The note takes effect on 1 July 2026 and contributions are a condition of employment under its terms.
All four Practice Notes were issued by ERS Commissioner General Brightwell Nkambule from Ezulwini in March 2026.
