Personal income tax in Pravin Gordhan’s cross hairs, says Dennis Davis
Political climate makes VAT untouchable, while the finance minister cannot ‘fiddle around with corporate taxes’, warns Davis Tax Committee head
With Finance Minister Pravin Gordhan unlikely to announce increases in value added tax (VAT) and corporate income tax when he presents his 2017-18 budget on Wednesday, the only option is for personal income tax rates to go up, Davis Tax Committee head Judge Dennis Davis said Monday. In an address to the Cape Town Press Club, Dave said Gordhan would have to fill a R28bn revenue shortfall in very difficult circumstances as growth had not been sufficiently high to generate what was required. Taxes would have to go up, Davis said, but the political climate would make it exceedingly difficult for VAT to be increased. "It probably won’t happen", even though Davis conceded that a two percentage point increase in VAT would be sufficient to meet most of the R28bn revenue shortfall. He also said it would not be possible to "fiddle around with corporate taxes". Davis noted that other African countries were reducing their corporate tax rates and if SA was to increase its rate, it would become u...
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