Use tax incentives to woo investors, SA told
The World Bank urges action to fend off a downgrade using tax incentives in key sectors
SA should shake up its tax system to focus incentives in those sectors where the private sector is most likely to invest to create jobs and lift SA’s economic growth rate. That is the advice from the World Bank, which in its latest report on SA identified manufacturing, agriculture, construction and trade (which includes tourism) as the sectors which have proved most responsive to favourable tax changes and where investment tends to generate the most jobs. The report, which comes after SA narrowly averted a downgrade of its credit rating to subinvestment grade (junk) status in late 2016, urges policy makers to take action to increase private sector investment to drive a sustainable increase in growth and fend off a downgrade.A joint World Bank/Reserve Bank study last year predicted that a downgrade to junk status would shave one percentage point off SA’s growth rate and pitch 160,000 more people into poverty. SA has long had a wide range of tax incentives administered by the Departm...
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