Budget 2017
CORPORATE TAX: Buoyant source of revenue
While personal tax receipts have been below expectations, corporate tax has grown strongly thanks to increased compliance and measures to limit avoidance. Treasury performs a juggling act to please the goose that lays the golden eggs
The corporate income tax rate was once again held at 28%. Yet it has turned out to be the most robust of the four major revenue sources. While personal tax receipts have been below expectations, corporate income tax bagged R189bn in the 2016 tax year, R2.1bn ahead of budget. In the 2017 year, which closes next week, it was R6.8bn ahead at R205bn. As a rule, corporate tax brings in about half as much as personal tax. By 2020 corporate tax revenue will increase to R252bn. Corporate tax has proved to be one of the SA Revenue Service’s success stories. It helps that it is easier to collect than personal tax as corporates have nowhere to hide. It grew particularly strongly from 2001 to 2009 not just because of economic growth and the commodities boom but also thanks to increased compliance and measures to limit tax avoidance. There were pockets of buoyancy which helped collections. Export values increased by 8.1% in the first three quarters of 2016. Export volume growth is expected to in...
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