SA should not expect major announcements on tax policy
Johannesburg, 21 October 2013 - South Africa should expect little about new tax policy when the Minister of Finance delivers his Medium-Term Budget Policy Statement (MTBPS), says professional services firm Deloitte.
So says Nazrien Kader, National Taxation Services Leader, at Deloitte, who adds that “the expectations that many South Africans have about tax announcements will probably not be realised by the Minister who has, until now, concentrated on preparing the ground for the budget policy event by announcing ‘tit bits’ around various tax issues.”
“These include Carbon Tax; e-tolls; base erosion and profit shifting to counter tax avoidance through transfer pricing and international tax structuring; the employment tax incentive; special economic zone (SEZ’s); the next steps on the road to National Health Insurance (NHI), and the future of mining tax – all of which have elicited much debate, with no real certainty on how it will impact the average South African.”
Perhaps the only exception says Kader “could be in the area of exchange controls, where the Minister could take the opportunity presented by the MTBPS speech to discuss possible scrapping of regulations that are prohibitive when it comes to the free flow of capital.”
“There is no chance that exchange controls will be abolished, but it can be expected that following Mark Shuttleworth’s recent court victory, the State could make announcements regarding their intentions on reviewing South African Reserve Bank regulations that are considered ‘unconstitutional’.“
“What is certain is that South Africans will not take kindly to any tax hikes when everyday debate swirls around issues such as wasteful spending in the public sector, subdued economic growth projections and declining revenue projections with a rising tax to GDP ratio. It appears as though the Minister has abrogated the responsibility of questioning whether South Africa’s tax policy and tax system is aligned with the broader economic objectives of the country to the Davis Committee.”
“Minister Gordhan needs to restore confidence – not just for South Africans but for those rating agencies that will pounce on any indication that our budget deficit will come in way off target,” Kader says.