TREATIES AND COMPETITION
Global tax symmetry can gnaw at vital national tax bases
There is no doubt that we live in a time of economic nationalism. Trump’s "America first" slogan swept him to victory in the 2016 presidential election and he is now making good on that rhetoric by, for example, imposing tariffs on the import of steel to the US. Similarly, the UK is hinting at using tax as a threat in its Brexit negotiations, in terms of which it would compete with the EU jurisdictions using tax rates and incentives. SA’s 2018 budget commented that our current corporate tax rate of 28% is relatively high when compared to, for example, the US at 21% (down from 35%), the UK at 19% (down from 30%) and the Netherlands at 21% (down from 26%). As pointed out in the budget, various African jurisdictions may have a comparable or even slightly higher corporate tax rates than SA, but this is often offset or reduced by incentives and tax holidays. There is a global competition for tax base and one way of increasing this is to stimulate investment and economic growth. This is i...
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