It seems that Treasury may have been pushed into a corner when it comes to corporate taxes and the deficit in the national budget. Treasury itself has commented that already high corporate income taxes should not be increased for fear that it could lead to increased disinvestment in the economy. Yet, as the Davis Tax Committee (DTC) concluded last week in its final report on corporate tax in SA, reducing it will not be enough to attract additional investment on its own. Globally, the trend in developed countries has been to decrease corporate tax rates to attract additional investment. As the trend-setter on the African continent, we should be comparing ourselves to our trade partners in these regions. At the start of this year, the US reduced its corporate tax rate from 35% to 21%, and other countries, such as France and Belgium, have introduced proposals to do the same. However, owing to the large budget deficit, SA has not had the luxury of following suit. It is also worth noting...
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