What’s making CEOs so angry about the dividend tax hike?
The majority of companies surveyed in the Merchantec CEO Confidence index say the new regime could affect investment negatively
The increase in taxes paid on dividends could be to the detriment of economic growth and job creation, say various companies across SA. A quarterly report by the Merchantec CEO Confidence index published on Thursday said that 91.5% of CEOs interviewed expressed concern over the rise in the dividend withholding tax rate. Finance Minister Pravin Gordhan announced in the budget in February that the rate would rise from 15% to 20%. Merchantec said there was concern that the increase might affect investment negatively, as companies would take their capital offshore. "It has been suggested that the broadening of tax sectors and bases needed to be investigated," it said. The survey indicated that some CEOs believed tax hikes were necessary. But increasing the tax on dividends, which tended to be paid by institutions and the wealthy, was "diametrically opposed to growth and job creation". The Merchantec confidence index surveys 1,000 CEOs in the resources, consumer goods and services, finan...
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