G/SCM/N/401/SWZ  
 
21 November  2023 
(23-7823) Page: 1/4 
Committee on Subsidies and  
Countervailing Measures  Original:  English  
 
  
SUBSIDIES  
NEW AND FULL NOTIFICATION PURSUANT TO ARTICLE XVI:1 OF  
THE GATT 1994 AND ARTICLE 25 OF THE AGREEMENT ON  
SUBSIDIES AND COUNTERVAILING MEASURES  
ESWATINI  
The following communication, dated and received on 17 November  2023, is being circulated at the 
request of the delegation of Eswatini . 
 
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The Kingdom of Eswatini 's notification for the fiscal years (FY) 2020/21 and 2021/22 comprises 
industr ial tax incentives , development tax concessions , special economic zones and export finance  
scheme.  
The notification process under Article 25 of the Agreement on Subsidies and Countervailing Measures 
(ASCM) aims to enhance transparency by calling for the pr ovision of information on the operation of 
the notified programs and measures. Therefore, and further pursuant to Article 25.7 of the ASCM, 
this notification does not prejudge the legal status, nature or effects of notified programs under the 
ASCM and GATT  1994; certain programs included in this notification may not be considered as 
"specific subsidies" within the meaning of the Agreement.  
(I) TAX INCENTIVES  
1. Title of the subsidy programme  
Tax incentives; (a) Machinery initial allowance, (b) infrastructural initial allowance, (c) building initial 
allowance, (d) capital expenditure (mining operations).  
2. Period covered by the notification  
The period of notification covered is the 2020/2021 and 2021/22 financial years.  
3. Policy objective and/or purp ose of the subsidy  
The purpose of the tax incentive is to remove the excess tax burden thereby encouraging foreign 
direct investments amongst other advantages.  
4. Background and authority for the subsidy  
Income Tax Order of 1975 (as amended).  The responsible Ministry in terms of the Act is the 
Ministry  of Finance.  
5. Form of the subsidy  
Tax concessions . G/SCM/N/401/SWZ  
 
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  6. To whom and how the subsidy is provided  
(a) Machinery initial allowance is in respect of machinery or plant bought by the taxpayer/investor 
in the process of manufacture. The allowance is at the total rate of 50 % of the total cost of the 
machinery and does not include motor vehicles intended for use on the roads.  
(b) Infrastructural initial allowance is in respect of infrastructural machinery, plant or faciliti es, 
including transmission equipment, lines in the provision of infrastructural services. The allowance is 
at the rate of 50 % of the cost incurred by the taxpayer and 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.  
(c) Building initial allowance is in respect of building other than hotel and improvements if such 
building is wholly/mainly used for the purpos e of housing machinery or plant for the purpose of 
housing machinery or plant for the year of assessment during which the building is first used. The 
allowance is given at the rate of 50 % of the actual cost of the building plus 4 % annual allowance on 
cost remaining after initial allowance.  
(d) Capital expenditure (Mining operations) is in respect of income derived by a taxpayer from mining 
operations prior to the commencement of production or during any period of non -production.  
7. Amount of the s ubsidy  
Inform ation not available . 
8. Duration of the subsidy  
The programme commenced in 1975 and is ongoing.  
9. Statistical data permitting an assessment of the trade effects of the subsidy  
Information not available . 
(II) EXPORT CREDIT GUARANTEE SCHEME  (ECGS)  
1. Title of the su bsidy programme  
Export Credit Guarantee Scheme . 
2. Period covered by the notification  
The period of notification is the 2020/2021 and 2021/2022 financial year.  
3. Policy objective and/or purpose of the subsidy  
The Export Credit Guarantee Scheme (ECGS) enables exporters to obtain loans from commercial 
banks at concessionary interest rates.  The ECGS ensures access to credit for exporting SMEs through 
issuing of credit guarantees to participating commercial banks using the Pre -shipment and 
Post-Shipment Cr edit facilities.  
4. Background and authority for the subsidy  
The Scheme is a special fund established and administered by the Central Bank of Eswatini (CBE) in 
terms of section 41 bis of the Central Bank Order 1974 (as amended).  
5. Form of the subsidy  
Loan guar antees.  G/SCM/N/401/SWZ  
 
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  6. To whom and how the subsidy is provided  
This is available to exporters. To be eligible, exporters must be registered in Eswatini and submit 
complete project proposals to their bank. The ECGS covers 90 % of the FOB value of the goods to 
be exported, up from 70 % at the time of the last Review. The maximum guarantee to a single 
exporter is E 3.3 million. The rate of interest applicable is the ruling prime rate plus 1 % per annum. 
In addition, the ECGS charges a premium of 1.5 % of the guaranteed amount wh en issuing 
guarantees.  
7. Amount of the s ubsidy  
As at end -2022, Central Bank of Eswatini 's total guaranteeing capacity stood at E 25 million.  
8. Duration of the subsidy  
The Scheme commenced its operations in the early 1990s and was launched by His Majesty 
the King Mswati III. The programme is ongoing and there was no set date for ceasing operations.  
9. Statistical data permitting an assessment of the trade effects of the subsidy  
Information not available.  
(III) SPECIAL ECONOMIC ZONES  
1. Title of the subsidy programm e 
Special economic zones.  
2. Period covered by the notification  
The notification period covers the 2020/2021 and 2021/2022 financial years.  
3. Policy objective and/or purpose of the subsidy  
The purpose of special economic zones in terms of the Act shall be for t he purpose of economic 
development by attracting foreign and domestic investments and ensuring the transfer of technology 
and for the purpose of exporting products produced in the special economic zones.  
4. Background and authority for the subsidy   
Special Economic Zones Act 3 of 2018  in the Ministry of Commerce, Industry and Trade under the 
Investor Road Map Unit . 
5. Form of the subsidy  
Investment  incentives  in the form of tax exemptions . 
6. To whom and how the subsidy is provided  
The First Schedule in th e Act on investment incentives, provides that an investor in the special 
economic zone shall be entitled to the following, but not limited, incentives; exemption from the 
payment of corporate tax for an initial period of twenty years and thereafter a corpo rate tax of shall 
be charged at the rate of five percent, remission of customs duty, value added tax and any other 
tax payable in respect of goods purchased for use as raw material, equipment, machinery including 
all goods and services directly related to manufacturing in the special economic zones.  Presently, 
the King Mswati International Airport and Royal Eswatini Technology Park are designated special 
economic zones in terms of the Act.  G/SCM/N/401/SWZ  
 
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  7. Amount of the s ubsidy  
Information not available.  
8. Duration of the sub sidy 
The programme commenced in 2018 and is ongoing.  
9. Statistical data permitting an assessment of the trade effects of the subsidy  
Information not available.  
(IV) DEVELOPMENT APPROVAL ORDER  (DAO)  
1. Title of the subsidy programme  
Developmental tax concessions . 
2. Period covered by the notification  
The period covered by the notification is the 2020/2021 and 2021/2022 financial years.  
3. Policy objective and/or purpose of the subsidy  
This is a tax instrument that grants tax concessions, including reduced corporate tax es to businesses 
that are considered to be beneficial to the development of the economy.  
4. Background and authority for the subsidy  
Section 69 of the Income Tax Order of 1975 as amended in 2011 , under General Notice No.  56 
of 2000. The relevant ministry is t he Ministry of Finance.  
5. Form of the subsidy  
Tax concession.  
6. To whom and how the subsidy is provided  
The Minister of Finance is required to ascertain that any new business applying for a developmental 
tax concession will substantially benefit the economic d evelopment of the country. Successful 
applicants will be granted a concession on corporate tax at a ceiling rate of 10 %. In addition, they 
will receive an exemption from the withholding tax on dividends for a period spanning 10 years. This 
concession is restricted to sanctioned new investments in the following sectors: manufacturing, 
mining, international services, and tourism. To be eligible, the investment must fundamentally 
operate as a developmental enterprise.  
7. Amount of the s ubsidy  
Information not available.  
8. Duration of the subsidy  
This programme commenced in April 2000 and is ongoing.  
9. Statistical data permitting an assessment of the trade effects of the subsidy  
Information not available . 
 
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