ERS collects over E100mln in taxes through EFIU in three years
ESWATINI’S fight against money laundering and the illicit follow of cash is seemingly yielding positive results with the country’s revenue authority collecting well over E100 million in three years.
The Eswatini Revenue Service (ERS) has revealed that it was able to collect a sum of E100 million in taxes – thanks to the intervention of the Eswatini Financial Intelligence Unit (EFIU).
The EFIU is a highly capable public institution that safeguards the financial system from illicit use, striving towards Eswatini which is free of all financial crimes.
On its website, it states that it safeguards the financial system from illicit use and combats money laundering and terrorist financing by detecting, collecting, analyzing and disseminating financial intelligence to stakeholders.
According to a report delivered by Marwick Khumalo, the Chairman of the Ministry of Finance Portfolio Committee, which was adopted and passed in Parliament on Friday, there have been positive responses on tax evasion where Eswatini Revenue Service instituted investigations and some of the tax evaders have been made to pay the outstanding taxes to ERS.
“The EFIU receives suspicious transactions reports, analyses and sends intelligence reports to Law Enforcement Agents The issue of whether the transactions are linked to criminal activity is still a matter for investigation by the Law Enforcement Agencies. Over the past three years, the ERS has collected over E100 million in taxes based solely on financial intelligence disseminated by the EFIU,” part of the report reads.
When the Ministry was asked if the EFIU has received a budget from Parliament for its work, how come there have not been any arrests emanating from their work?
The Ministry explained that the EFIU does not have the power to investigate or arrest but its mandate is to analyze and disseminate financial intelligence to Law Enforcement Agents who in turn investigate and arrest perpetrators who have been found to have committed an offence.
While efforts and mechanisms are in place, the issue continues to persist with the latest reports indicating that over E200 million flowed illicitly in the past year in the Kingdom.
The Ministry of Finance revealed the activities of the Eswatini Financial Intelligence Unit (EFIU) for the 2023/24 financial year (FY), highlighting its role in combating money laundering and other financial crimes in the Kingdom.
In a report presented in Parliament, it is viewed that the EFIU received a significant volume of Suspicious Transaction Reports (STRS) in 2023, totalling 1,005. These reports flagged transactions with a potential laundered amount of E283,139,335.80, indicating a substantial flow of funds suspected to be illicit.
Furthermore, the unit received 38,652 Cash Threshold Reports (CTRS) with a combined transaction value of E3,484,084,588.00. CTRS are mandatory reports filed by accountable institutions (such as banks) when handling cash transactions exceeding a certain threshold.
The EFIU actively disseminates information derived from these reports to relevant authorities. In 2023, the unit produced 16 proactive/spontaneous intelligence reports shared with law enforcement agencies, potentially aiding investigations into financial crimes.
The report also sheds light on the types of offences identified through reported transactions. Tax evasion remains the most prevalent predicate offence (the underlying crime generating the suspicious funds) reported in the Kingdom.
Beyond receiving reports, the EFIU also plays a role in information exchange and capacity building. In 2023, the unit responded to 10 requests for financial intelligence from authorized entities, demonstrating its collaborative efforts with other investigative bodies.
The year also saw progress in the EFIU’S development. The unit’s 2026 strategic plan was approved by the board, outlining its future direction. Additionally, a dedicated bank account was established to receive fines and penalties imposed on accountable institutions for non-compliance with antimoney laundering regulations.
The report concludes by mentioning the EFIU’S ongoing pursuit of EGMONT Group of FIUS membership, a prestigious international group of financial intelligence units. This membership would further strengthen the unit’s capacity to combat financial crime through enhanced international cooperation.
Apart from illicit cash, the EFIU noted that emaswati continues to invest sums of money in informal schemes with the hopes of getting high returns on the money invested.
Although an obvious pattern of the informal schemes emerging and crashing after a few months, our sister newspaper, the Eswatini Financial Times recently shared that emaswati have lost over E340 million in a pyramid and Ponzi schemes.
The combatting of the illicit flow of money has become a regional fight with the Southern African Development Community (SADC) upping the ante. SADC announced this year that it has commenced the process to operationalise the Committee on Antimoney Laundering and Combating the Financing of Terrorism (AML/CFT) as per the provision of Annex 12 of the SADC Protocol on Finance and Investment.
The inaugural meeting of the Committee took place in February. The Committee will among others, facilitate the convergence of the AML/CFT policies, laws and regulatory practices of SADC Member States within the framework of the Financial Action Task Force (FATF) Recommendations and support effective and proportional action against money laundering and the financing of terrorism in the region.