Electronic payment requirement to be incorporated in trading licenses
The days of trading in cash alone will soon be coming to an end for some businesses in the country.
From tax evasion, money laundering, embezzlement, and fraud, the country has lost billions of Emalangeni over the years. This has been a result of retail outlets that refuse to use digital banking options and insist on cash transactions with customers and, in turn, under-declaring revenue or not at all.
This concern has been bugging politicians for years, especially after having identified Asian nationals to be the major culprits of such conduct.
The Ministry of Commerce Industry and Trade has given assurance to implement measures such as partnering with financial institutions, incorporating electronic payment requirements into trading licenses, providing training, and supporting businesses to fight this scourge.
Minister Manqoba made this revelation when responding to questions posed by Members of Parliament in this regard during the ministry’s budget debate.
“The Ministry can play a crucial role in promoting financial inclusion, transparency, and efficiency in the economy,” Khumalo said.
MPs lamented that Asian businesses have a knack for banking ‘under mattresses’ because they transact in cash and refuse to use electronic payment in the form of card machines.
They further observed that in the event there is one available, it is shared amongst the businesses.
This they said is a practice that raises concerns about potential revenue losses for the government.
In 2017 the Eswatini Revenue Services (ERS) reported that the country was losing billions in suspected tax evasion and undetectable money trains through informal operations by Asian-owned businesses.
The service revealed this information in parliament when it was invited to answer questions on its experiences as it was administering revenue collection in the country regarding the Asian community.
ERS disclosed that it was discovered that Asians were into what could be classified as small and medium enterprises, whereby there was a lot of informality in the way they were doing business.
In turn, this caused problems for the ERS administration because of the difficulty of taxing an informal economy.
It was further discovered that the Asian community did not have facilities that would assist them in conforming to the dictates of their religion in terms of banking.
Therefore, Asians were found to be promoting the cash economy in the country which continues to date. On another note, there have been arrests of Asian nationals for offences like tax evasion amongst others.
In January, members of the Royal Eswatini
Police Service (REPS) arrested two Asian businessmen for alleged tax evasion and money laundering of about E10 million.
The suspects Ficha Irfan and Patel Abdulaziz were charged with five charges for allegedly contravening the Value Added Tax Act 12 of 2011 and one for purportedly violating the Money Laundering and Financing of Terrorism Prevention Act of 2011.
In one of the counts, the duo allegedly made false statements through tax returns for the period of April to June 2020 and under-declared a sum of E3.2 million to the ERS.