Nene’s tax challenge
28 November 2014
Posted by: Author: Ingé Lamprecht
Author: Ingé Lamprecht (Moneyweb)
South Africa does not have the scope to increase corporate tax rates, a new survey suggests.
Finance minister Nhlanhla Nene is under pressure to find ways to increase tax revenues to reduce South Africa’s budget deficit and keep rating agencies at bay. But with economic growth now expected to reach a meager 1.4% this year, any potential tax hikes would need to be implemented with care.
According to PwC’s Paying Taxes 2015 survey, South Africa’s total tax rate (a measure of the burden of all taxes a company must pay in relation to its commercial profit) of 28.8% ranks it 40th out of 189 countries. The global average total tax rate is 40.9%.
The survey compares the ease of paying taxes across 189 economies by considering the situation of a medium-sized business in its second year of operation. It studies the time the case study company needs to prepare, file and pay its taxes, the number of taxes it has to pay, the method of payment and the total tax liability as a percentage of its commercial profits.
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This article first appeared on moneyweb.co.za.