Tax revenue to drop steeply

Releasing the Medium Term Budget Policy Statement today [Wednesday] Finance Minister Nhlanhla Nene said revenue for this year had revised down by R7.6 billion.

“Revenue has nonetheless held up since the 2008/09 recession. This signals both the resilience of our tax policy framework and continued strength of tax administration.”

Over the medium term government would continue to explore reforms that would promote an efficient and progressive tax system.

Recommendations of the Davis Tax Committee that were being considered were: profit shifting and the misuse of transfer pricing; mining taxation; small business taxation and VAT and estate duty.

Nene said he had also asked for further advice on wealth taxes.

“The committee has published an instructive report on the role of the tax system in supporting inclusive growth, employment, equity and fiscal sustainability.”

He said there would also be an opportunity to further debate the proposed design of a carbon tax when a draft bill would be published later this month.

This would form part of South Africa’s package of measures which it would take to the United Nations Climate Change Conference later this year.

“This package is intended to ensure that South Africa makes a fair contribution to global efforts to reduce greenhouse gas emissions,” said Nene.