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CityPress - - Business And Tenders & Auctions - JUSTIN BROWN justin.brown@city­press.co.za

The im­ple­men­ta­tion of the car­bon tax, which has been on the cards for years, was likely to be de­ferred to 2018, Nazrien Kader, Deloitte Africa head of tax­a­tion ser­vices, said this week.

Izak Swart, Deloitte car­bon tax direc­tor, said: “The tax has been kicked down the road for years.”

The car­bon tax had re­sulted in “di­vi­sive” de­bates be­tween en­vi­ron­men­tal­ists who strongly sup­port it and heavy in­dus­try that is ve­he­mently op­posed to it.

Fac­tors that would in­crease the chance of the tax be­ing im­ple­mented were that South Africa had signed the Paris Agree­ment that dealt with green­house gas emis­sions mit­i­ga­tion, adap­tion and fi­nanc­ing start­ing in 2020, Swart said.

Govern­ment had also writ­ten soft­ware pro­grams for the car­bon tax, Swart said.

“Im­ple­ment­ing the tax is com­plex. Un­cer­tainty is not good for in­vestor con­fi­dence, so the car­bon tax is­sue should be re­solved,” he said.

Turn­ing to Gord­han’s bud­get speech on Fe­bru­ary 22, Kader said that there would be an in­crease in taxes across the spec­trum. Gord­han was likely to bal­ance the need for aus­ter­ity with the need for ex­pan­sion, Kader said.

She was hope­ful that the rat­ings agen­cies would heed the ef­forts that Gord­han and govern­ment were mak­ing and al­low South Africa to main­tain an in­vest­ment grade rating.

In his “mini bud­get” in October last year, Gord­han flagged that Na­tional Trea­sury would need to find R28 bil­lion in ex­tra rev­enue in the tax year to Fe­bru­ary 2018.

In 1994, there was a tran­si­tional levy tax that was im­posed, Kader said, and that was a one-off tax. There was scope for an­other such one-off tax, such as a wealth tax, that could be im­posed to bal­ance govern­ment’s books, she said.

The av­er­age VAT rate in Africa was 15.25%, which com­pared with South Africa’s VAT rate of 14%, she said. How­ever, any in­crease in the VAT rate would be “very un­pop­u­lar”, Kader said. She added that she was in favour of a tiered VAT sys­tem.

Gord­han was likely to lessen fis­cal drag, which is the re­lief given to tax­pay­ers ow­ing to in­fla­tion, as a means to get more money in the cof­fers, she said.

Sin taxes and the fuel tax were likely to in­crease by more than in­fla­tion, Kader said.

The spe­cial vol­un­tary dis­clo­sure plan closes in June 2017 and could bring in R10 bil­lion in tax rev­enue for govern­ment, Kader said. The last time a tax amnesty was of­fered, it gave govern­ment a R48 bil­lion boost.

Gord­han an­nounced in his mini bud­get that all govern­ment tax in­cen­tives were un­der re­view and that the re­view would be com­pleted in October.

Nazeer Es­sop, Deloitte pub­lic sec­tor leader, said that the growth in tax col­lec­tion was mov­ing much faster than the growth in the econ­omy.

Es­sop said that cor­rup­tion was still rife in govern­ment and so was “fruit­less and waste­ful” ex­pen­di­ture.

Billy Jou­bert, Deloitte trans­fer pric­ing direc­tor, said that trans­fer pric­ing doc­u­men­ta­tion in South Africa had be­come com­pul­sory.

Trans­fer price rules are aimed at pre­vent­ing multi­na­tional groups from shift­ing prof­its to low-tax ju­ris­dic­tions.

Com­ply­ing with trans­fer-pric­ing reg­u­la­tions was be­com­ing a “mas­sive chal­lenge and quite dra­co­nian”.

“Trans­fer pric­ing is a high-risk area for our clients,” Jou­bert said.

Ash­leigh Theo­phanides, Deloitte healthcare ac­tu­ary, said there was a lot of un­cer­tainty around the fi­nanc­ing of Na­tional Health In­sur­ance.

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