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Another tax on businesses?

Friday, 16 September 2011   (0 Comments)
Posted by: SAIT Technical
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Another Tax?

by Michael Stein

Business Day (2 September 2011) reported that the South African Local Government Association’s (Salga’s) national executive committee was considering a proposal made at its national conference for a tax on businesses in metropolitan areas, according to its KwaZulu-Natal chairman Welcome Mdabe. Five metropolitan areas – eThekwini, Johannesburg, Nelson Mandela Bay, Ekurhuleni and Cape Town – are reportedly spearheading a proposal for a tax on businesses that could rise up to R19bn a year for the municipalities.

The tax may take the form of a percentage of turnover, or of a combination of depreciation and employees’ remuneration. Coenraad Bezuidenhout, head of economic policy at Business Unity SA, is quoted as saying "It’s something that concerns business because the cost of doing business in SA is already a matter of concern”. To my mind, the imposition of yet another tax in SA is totally unacceptable, since we already pay more than twenty different taxes in this country, not to mention the scandalous highway toll fees that are on the way. Most of the taxes in SA are paid by a relatively small base of taxpayers, although some, such as vat and, arguably, taxes on business are effectively borne by consumers.

To make things worse, it seems that much of what is collected in taxes is mismanaged. South Africans who can afford to do so use private security companies to try to provide some form of security rather than rely on a largely ineffective saps, send their children to private schools rather than some poor government schools, and use private hospitals rather than some of our notoriously dysfunctional public hospitals.

And on a municipal level Johannesburg, which claims to be a world class African city, leaves much to be desired, what with its disgracefully inefficient billing system, and its often inoperative robots and street lights, and many pothole riddled and corrugated streets. I, for one, have hardly ever seen a metro police officer in this city actually directing traffic at a robot that is out of order. Thank heavens for the private sector’s Outsurance, which often fills the gaps in directing traffic.



Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.

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