Reducing corporate tax for better wages: Eswatini’s textile-clothing companies

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Some companies in the textile and garment industry in Eswatini have asked for a reduction in corporate tax from 25% to 10%, as in Lesotho, to increase wages. Wage negotiations broke down, with employers and the government apparently voting for a 7.25% raise, while the Amalgamated Trade Union of Swaziland (ATUSWA) demanded a 15% raise.

Some companies are also seeking unpaid redundancies from the labor commissioner’s office following unprecedented torrential rains in KwaZulu-Natal province, South Africa, where raw materials were destroyed.

The province is essential to the economy of the country as it has a major port used for exports and imports of items to and from Eswatini for international customers.

Some companies in the textile and garment industry in Eswatini have asked for a reduction in corporate tax from 25% to 10%, as in Lesotho, to increase wages. Wage negotiations broke down as the employers and government apparently voted for a 7.25% raise, while the Swaziland Amalgamated Union demanded a 15% raise.

The companies said the domestic industry has faced huge challenges in recent years due to the opening of several factories in Newcastle, South Africa, which offers them a new discount policy.

They said the political environment in Lesotho, Botswana and Namibia could also prompt them to look for new factories there. The ongoing political challenges in Eswatini have also posed a big threat to the sector.

They said the drastic increase in fuel prices had created a perfect storm that sent them even further into a downward spiral, according to a report in a local English-language daily.

Fibre2Fashion (DS) News Desk

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