18 August 2008(Business Day-Johannesburg)
CONSTANT changes to SA's tax law changes were undermining investor confidence, especially as many of them had been imposed with retrospective effect, Ed Liptak, director of corporate tax at commercial law firm Webber Wentzel, said at the weekend
Showing posts with label South Africa. Show all posts
Showing posts with label South Africa. Show all posts
Monday, August 18, 2008
Friday, August 15, 2008
South Africa: Former SARS Official Denies Tax Evasion Charges
15 July 2008 (Allafrica.com)
SOUTH African Revenue Service (SARS) commissioner Pravin Gordhan's former right-hand man, Edward Mushanganyisi, appeared in the Johannesburg Magistrate's Court yesterday on tax evasion charges.
SOUTH African Revenue Service (SARS) commissioner Pravin Gordhan's former right-hand man, Edward Mushanganyisi, appeared in the Johannesburg Magistrate's Court yesterday on tax evasion charges.
Thursday, June 12, 2008
South Africa: Fuelling Debate.
12 June 2008 (Allafrica.com)
IF IT is any consolation to our beleaguered government, it is not the only administration in the world that is under pressure to cut fuel taxes to provide relief for hard-pressed consumers. Business and consumer groups have been baying for fuel tax cuts in much of the developed and developing world. It was even an issue during the US presidential nomination process, although now that Hillary Clinton has thrown in the towel, her call for a fuel tax holiday seems to have fallen by the wayside.
IF IT is any consolation to our beleaguered government, it is not the only administration in the world that is under pressure to cut fuel taxes to provide relief for hard-pressed consumers. Business and consumer groups have been baying for fuel tax cuts in much of the developed and developing world. It was even an issue during the US presidential nomination process, although now that Hillary Clinton has thrown in the towel, her call for a fuel tax holiday seems to have fallen by the wayside.
Friday, March 28, 2008
South Africa: New Tax Regime 'Will Attract Multinationals
28 March 2008-
SA NEEDS to adjust its tax regime in order to entice multinationals to set up operations in the country as a base for expanding into Africa, says an international tax expert.
Wilfred D'Haese, PricewaterhouseCoopers' tax partner based in Belgium, said on a recent visit to SA that the company rate cut in the budget was a positive sign.
SA NEEDS to adjust its tax regime in order to entice multinationals to set up operations in the country as a base for expanding into Africa, says an international tax expert.
Wilfred D'Haese, PricewaterhouseCoopers' tax partner based in Belgium, said on a recent visit to SA that the company rate cut in the budget was a positive sign.
Thursday, March 20, 2008
South Africa: Manuel Calls Bluff of Tax-Avoidance Schemes
20 March 2008 - (Allafrica.com
Finance Minister Trevor Manuel yesterday announced that tough measures were in the pipeline to crack down on tax avoidance schemes that used legitimate transactions to generate artificial deductions through excessive financing
Finance Minister Trevor Manuel yesterday announced that tough measures were in the pipeline to crack down on tax avoidance schemes that used legitimate transactions to generate artificial deductions through excessive financing
Monday, March 17, 2008
SOUTH AFRICA*: South. A review mining royalty bill – minister
Mon 17 Mar 200 (Reuters)
South Africa's government may review a draft bill that would increase royalty payments for mining firms after complaints from companies and unions, the minerals and energy minister said on Monday.
South Africa's government may review a draft bill that would increase royalty payments for mining firms after complaints from companies and unions, the minerals and energy minister said on Monday.
Sunday, March 9, 2008
SOUTH AFRICA: Private equity tax loopholes to tighten
March 9, 2008: Johannesburg - (Business Report)
In the recent budget, the treasury said it would examine the taxes paid by companies bought out in private equity deals to determine whether the fiscus was losing out on revenue
In the recent budget, the treasury said it would examine the taxes paid by companies bought out in private equity deals to determine whether the fiscus was losing out on revenue
Friday, November 2, 2007
'Corruption rises' as Africa gains from oil
(Business Day)
Strong economic growth and huge windfalls from high oil prices have fuelled corruption in sub-Saharan Africa and robbed countries of funds for development, researchers said at a World Bank Summit on Friday.
Academics from the University of Massachusetts said billions of dollars continued to leave the continent for secret bank accounts overseas.
"If anything, capital flight is on an increasing trend in the past few years," said University of Massachusetts economics professor James Boyce, who has researched the subject for more than five years.
"And now, with oil windfalls in some countries, the pie from which to take is that much bigger." His research found that about half-a-trillion dollars left the continent between 1970 and 2004. About $35-billion left the continent in 2003 alone.
Oil exploration and production is on the increase in Africa as international companies and countries such as China race to stake a claim on the resources.
Oil prices have risen 40 percent since mid-August, driven by expectations of tighter supplies, a weak dollar and an inflow of money into commodities.
Capital flight
Researchers said despite the emergence of more democratic governments in Africa, capital flight was on the increase because there had not been successful prosecutions of leaders who had left their countries poorer.
It was the single biggest threat to the continent's developmental goals, they said.
"Capital flight has had adverse welfare and distribution consequences on the overwhelming majority of poor in numerous countries in that it heightened income inequality and jeopardised employment prospects," Central Bank of Kenya Governor Njuguna Ndung'u said in a written speech.
The international community needed to cooperate with authorities to clamp down on corrupt officials, Boyce said.
"There are international laws countries could use to track and have their money returned," he said.
"They can go as far as refusing to pay loans, if they can show that the huge loans were for the personal benefit of leaders and not for the country."
Last month, Britain extended an court order freezing $35-million of assets belonging to a former Nigerian state governor.
James Ibori was governor of the oil-producing Delta state and a close associate of President Umaru Yar'Adua.
Compounding the problem was a lack of laws and capacity to enforce them where they existed, said Jerry Rowe, regional adviser for Africa and Middle East at the US Treasury.
"To some extent some countries are stepping up legislation and putting up measures (to fight corruption). With some countries it is really capacity problems and the inability to enforce already existing laws," he said.
Despite robust economic growth and vast mineral wealth in sub-Saharan Africa, millions of people live below the breadline, also hampered by conflict and civil war in some countries.
Benefits from recent debt relief would be short-lived if the trend was not reversed or some of the stolen money repatriated, researchers said.
"Even if 25 percent of the money were to be repatriated, Africa would go a long way to working on its developmental goals," said Hippolyte Fofack, senior economist at the World Bank, the main organiser of the summit.
Strong economic growth and huge windfalls from high oil prices have fuelled corruption in sub-Saharan Africa and robbed countries of funds for development, researchers said at a World Bank Summit on Friday.
Academics from the University of Massachusetts said billions of dollars continued to leave the continent for secret bank accounts overseas.
"If anything, capital flight is on an increasing trend in the past few years," said University of Massachusetts economics professor James Boyce, who has researched the subject for more than five years.
"And now, with oil windfalls in some countries, the pie from which to take is that much bigger." His research found that about half-a-trillion dollars left the continent between 1970 and 2004. About $35-billion left the continent in 2003 alone.
Oil exploration and production is on the increase in Africa as international companies and countries such as China race to stake a claim on the resources.
Oil prices have risen 40 percent since mid-August, driven by expectations of tighter supplies, a weak dollar and an inflow of money into commodities.
Capital flight
Researchers said despite the emergence of more democratic governments in Africa, capital flight was on the increase because there had not been successful prosecutions of leaders who had left their countries poorer.
It was the single biggest threat to the continent's developmental goals, they said.
"Capital flight has had adverse welfare and distribution consequences on the overwhelming majority of poor in numerous countries in that it heightened income inequality and jeopardised employment prospects," Central Bank of Kenya Governor Njuguna Ndung'u said in a written speech.
The international community needed to cooperate with authorities to clamp down on corrupt officials, Boyce said.
"There are international laws countries could use to track and have their money returned," he said.
"They can go as far as refusing to pay loans, if they can show that the huge loans were for the personal benefit of leaders and not for the country."
Last month, Britain extended an court order freezing $35-million of assets belonging to a former Nigerian state governor.
James Ibori was governor of the oil-producing Delta state and a close associate of President Umaru Yar'Adua.
Compounding the problem was a lack of laws and capacity to enforce them where they existed, said Jerry Rowe, regional adviser for Africa and Middle East at the US Treasury.
"To some extent some countries are stepping up legislation and putting up measures (to fight corruption). With some countries it is really capacity problems and the inability to enforce already existing laws," he said.
Despite robust economic growth and vast mineral wealth in sub-Saharan Africa, millions of people live below the breadline, also hampered by conflict and civil war in some countries.
Benefits from recent debt relief would be short-lived if the trend was not reversed or some of the stolen money repatriated, researchers said.
"Even if 25 percent of the money were to be repatriated, Africa would go a long way to working on its developmental goals," said Hippolyte Fofack, senior economist at the World Bank, the main organiser of the summit.
Thursday, September 13, 2007
South Africa: De Beers Denies It Skipped Duty of R1bn
(Business Day)
Mining giant De Beers yesterday vigorously defended itself in Parliament against suggestions that it evaded paying about R1bn in export duty by allegedly exporting a stockpile of rough diamonds to London in 1992 without the necessary authorisation. The company's directors were called before Parliament's standing committee on public accounts (Scopa) yesterday to answer allegations that it exported 20-million carats of uncut diamonds worth $822m without an exemption certificate just before the 1994 democratic elections. With an export duty of 15%, this would have entailed a liability to the state of about $123m plus interest. In fact, De Beers paid no tax on its exports. The committee has for several years been trying to resolve the issue, but it succeeded in getting De Beers to submit relevant documents - such as correspondence and certificates - only when company representatives were called to appear before it yesterday. Scopa chairman Themba Godi said the committee was "sceptical" as it had taken De Beers such a long time to provide the relevant documents. African National Congress (ANC) MP Vincent Smith, who chaired the meeting, said the committee believed there was something "untoward" in the exports. It would not let go of the matter and would finally present a report to Parliament on it, he said. At issue is whether an "agreement" reached between De Beers and the South African Diamond Board (SADB) in February 1993 was legally binding. Legal opinion obtained by the auditor-general's office suggested the agreement was not legal because it was not signed by either party. The board's resolution noting the agreement was also not signed. However, De Beers commercial director Bruce Cleaver said the company's view was that the 1992 "arrangements" - including a letter by the SADB's then CEO and the company's subsequent written confirmation of it - constituted a legal, valid agreement. This was despite the fact that the annex to a CEO's letter containing the terms and conditions of the agreement was not signed by either party. Lengthy negotiations preceded the deal, which changed the way diamonds were exported to London. A quantity was re-imported for local cutters. The agreement had been reviewed twice before being amended in 1998. Also in dispute was the quantity of diamonds exported in 1992. Cleaver disputed the figures of the minerals and energy department. De Beers figures showed it had diamond stock of 1,6-million carats in that year. Cleaver insisted it was a "misconception" to believe the corporation had exported a huge stockpile which it had built up ahead of the elections. But the board, an executive in the auditor-general's office, Wallie van Heerden, and minerals and energy director-general Sandile Nogxina all said De Beers had exported a stockpile in 1992. Cleaver insisted there were no material spikes in the amount of diamonds exported in 1992 compared with previous and subsequent years. He said De Beers had comprehensive exemption certificates to prove this. Minerals and energy department figures showed a total of R1,7bn worth of diamond exports in 1991, R4,7bn in 1992 and R1,8bn in 1993. De Beers was responsible for the bulk of them. If 20-million carats were exported, this would be double SA's annual production of 8,4-million carats in1992. It would mean De Beers had indeed exported a stockpile. De Beers and Van Heerden agreed to meet to discuss the export figures.
Mining giant De Beers yesterday vigorously defended itself in Parliament against suggestions that it evaded paying about R1bn in export duty by allegedly exporting a stockpile of rough diamonds to London in 1992 without the necessary authorisation. The company's directors were called before Parliament's standing committee on public accounts (Scopa) yesterday to answer allegations that it exported 20-million carats of uncut diamonds worth $822m without an exemption certificate just before the 1994 democratic elections. With an export duty of 15%, this would have entailed a liability to the state of about $123m plus interest. In fact, De Beers paid no tax on its exports. The committee has for several years been trying to resolve the issue, but it succeeded in getting De Beers to submit relevant documents - such as correspondence and certificates - only when company representatives were called to appear before it yesterday. Scopa chairman Themba Godi said the committee was "sceptical" as it had taken De Beers such a long time to provide the relevant documents. African National Congress (ANC) MP Vincent Smith, who chaired the meeting, said the committee believed there was something "untoward" in the exports. It would not let go of the matter and would finally present a report to Parliament on it, he said. At issue is whether an "agreement" reached between De Beers and the South African Diamond Board (SADB) in February 1993 was legally binding. Legal opinion obtained by the auditor-general's office suggested the agreement was not legal because it was not signed by either party. The board's resolution noting the agreement was also not signed. However, De Beers commercial director Bruce Cleaver said the company's view was that the 1992 "arrangements" - including a letter by the SADB's then CEO and the company's subsequent written confirmation of it - constituted a legal, valid agreement. This was despite the fact that the annex to a CEO's letter containing the terms and conditions of the agreement was not signed by either party. Lengthy negotiations preceded the deal, which changed the way diamonds were exported to London. A quantity was re-imported for local cutters. The agreement had been reviewed twice before being amended in 1998. Also in dispute was the quantity of diamonds exported in 1992. Cleaver disputed the figures of the minerals and energy department. De Beers figures showed it had diamond stock of 1,6-million carats in that year. Cleaver insisted it was a "misconception" to believe the corporation had exported a huge stockpile which it had built up ahead of the elections. But the board, an executive in the auditor-general's office, Wallie van Heerden, and minerals and energy director-general Sandile Nogxina all said De Beers had exported a stockpile in 1992. Cleaver insisted there were no material spikes in the amount of diamonds exported in 1992 compared with previous and subsequent years. He said De Beers had comprehensive exemption certificates to prove this. Minerals and energy department figures showed a total of R1,7bn worth of diamond exports in 1991, R4,7bn in 1992 and R1,8bn in 1993. De Beers was responsible for the bulk of them. If 20-million carats were exported, this would be double SA's annual production of 8,4-million carats in1992. It would mean De Beers had indeed exported a stockpile. De Beers and Van Heerden agreed to meet to discuss the export figures.
Wednesday, August 15, 2007
South Africa: Experts Say Tax Incentives Don't Pull Investment
15th August 2007(Business Daily)
THE suggestion by one of SA's leading tax experts, that the granting of tax incentives for purposes of foreign direct investment is "fundamentally bad" has raised eyebrows in both business and labour sectors. Edward Nathan Sonnenbergs chairman Michael Katz, said last night that tax incentives "result in a misallocation of resources and drive up the country's corporate tax rates". Katz was part of a panel of speakers at a business conference held by accounting firm Grant Thornton. Katz said tax incentives can potentially drive up the country's corporate tax rates and can "lead to an increase in tax administration and tax compliance". "It is a far more viable option to have a lower corporate tax rate than to have tax concessions in place," he said. However, Congress of South African Trade Unions spokesman Patrick Craven said yesterday that although tax incentives are not a solution to SA's poverty, they do have a role to play in foreign direct investment and the creation of jobs. "Tax concessions are relevant for the economy; and not only to the foreign company that is investing the money ." Bill Lacey, a consultant to the South African Chamber of Business , said there had been a lot of interest recently in the idea that tax concessions be re-examined. "It seems tax incentives are back on the radar screen again," Lacey said. However, business is divided on the matter; some are in favour of incentives and others against them, he said. "The argument against tax concessions is that someone also has to pass the buck. Usually it is large business," Lacey said. Katz said the granting of tax concessions leads to an increase in compliance administration. Groups have to determine whether they fall within the concession, he said. This leads to opinions, further monitoring and administration. "The fiscus is spending unnecessary money and the taxpayer is having to fork out the costs." The government recently announced plans to bring back a popular industrial tax incentive, the Strategic Investment Programme (SIP), which was scrapped two years ago for not addressing the high unemployment rate. The new SIP is set to target downstream economic activity in the pharmaceutical, capital equipment, and transport sectors. Des Kruger a director at commercial law firm Mallinicks Attorneys, said the most common mistake a country can make is to rely on tax incentives to attract foreign investment. Several studies have shown that tax incentives are totally ineffective in attracting investment for the domestic market and have a small effect on export manufacturers, Kruger said.
THE suggestion by one of SA's leading tax experts, that the granting of tax incentives for purposes of foreign direct investment is "fundamentally bad" has raised eyebrows in both business and labour sectors. Edward Nathan Sonnenbergs chairman Michael Katz, said last night that tax incentives "result in a misallocation of resources and drive up the country's corporate tax rates". Katz was part of a panel of speakers at a business conference held by accounting firm Grant Thornton. Katz said tax incentives can potentially drive up the country's corporate tax rates and can "lead to an increase in tax administration and tax compliance". "It is a far more viable option to have a lower corporate tax rate than to have tax concessions in place," he said. However, Congress of South African Trade Unions spokesman Patrick Craven said yesterday that although tax incentives are not a solution to SA's poverty, they do have a role to play in foreign direct investment and the creation of jobs. "Tax concessions are relevant for the economy; and not only to the foreign company that is investing the money ." Bill Lacey, a consultant to the South African Chamber of Business , said there had been a lot of interest recently in the idea that tax concessions be re-examined. "It seems tax incentives are back on the radar screen again," Lacey said. However, business is divided on the matter; some are in favour of incentives and others against them, he said. "The argument against tax concessions is that someone also has to pass the buck. Usually it is large business," Lacey said. Katz said the granting of tax concessions leads to an increase in compliance administration. Groups have to determine whether they fall within the concession, he said. This leads to opinions, further monitoring and administration. "The fiscus is spending unnecessary money and the taxpayer is having to fork out the costs." The government recently announced plans to bring back a popular industrial tax incentive, the Strategic Investment Programme (SIP), which was scrapped two years ago for not addressing the high unemployment rate. The new SIP is set to target downstream economic activity in the pharmaceutical, capital equipment, and transport sectors. Des Kruger a director at commercial law firm Mallinicks Attorneys, said the most common mistake a country can make is to rely on tax incentives to attract foreign investment. Several studies have shown that tax incentives are totally ineffective in attracting investment for the domestic market and have a small effect on export manufacturers, Kruger said.
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