competitive concerns raised over SA approach on tax rates
26 June 2007

SA’s tax rate approach needed to be examined if the country was to remain globally competitive. Dermot Gaffney, head of Indirect Tax at KPMG SA, is quoted as saying in a Business Day report. The lowest company taxes are still to be found in the countries of the EU, according to a report released by KPMG International yesterday.

In a review of corporate tax rates in 92 countries at the beginning of this year, the average rate in the EU was 24.2%, compared with 27.8% in the OECD countries, 28% in Latin America and only 10.8% in Asia Pacific.’ However, Europe has the highest VAT rates, averaging about 19.5%, compared with 17.7% in the OECD, 14.2% in Latin America and only 10.8% in Asia Pacific.

From a SA point of view, the results shown by Europe and other emerging countries such as China and India, should lead to some interesting questions that can be taken by the government,’ said Gaffney. ‘

Currently SA has a headline rate of 14% on indirect tax, with a very broad base. This approach needs to be examined if we want to remain globally competitive and use fiscal policy to influence social behaviours, as done elsewhere.’

Full report at www.businessday.co.za
 
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