JOHANNESBURG – Tax experts believe the Tax Review Committee that was appointed by the minister on Wednesday exhibit a good balance of tax and business knowledge.
Judge Dennis Davis will chair committee.
Dirk Kotze, partner at Mazars, says the members are all people that are fairly well known in the tax and business community.
“I think there is a good mix between tax and business experience.”
Other members of the committee include prof Annet Wanyana Oguttu, prof Matthew Lester, prof Ingrid Woolard, Nara Monkam, Tania Ajam, prof Nirupa Padia, and Vuyo Jack.
Cecil Morden, an official from National Treasury and Kosie Louw, an official from the South African Revenue Service (Sars) will be ex-officio members and will provide technical support and advice to the committee.
Kotze says a committee like this has to comprise of people that have in-depth knowledge of how the tax system works and unfortunately that in itself excludes a lot of people, especially people from the public.
A tax system don’t just deal with the South African aspect of tax but has international ramifications which members also need to be aware of. Moreover, they have to be aware of the economy as a whole and need specialist knowledge and practical business exposure, he says.
Piet Nel, project director for tax at the South African Institute of Chartered Accountants (Saica), says they are quite pleased to see that the mix of the members include some chartered accountants.
According to biographies distributed by National Treasury, Lester and Jack are both qualified chartered accountants.
Nel says however, the qualifications of the members are not that important since the committee will get input from other people as well.
A member does not necessarily need tax technical experience because the brief of the committee is broader than just tax technical matters, it also looks at economics and how it fits into the National Development Plan, he says.
The people must be qualified, but they do not have to be specialists in tax matters. From that point of view, the committee is a balanced one, he says.
The announcement of the committee gives effect to an earlier announcement by the minister during the budget this year that government will initiate a tax review “to assess our tax policy framework and its role in supporting the objectives of inclusive growth, employment, development and fiscal sustainability”.
The terms of reference of the Tax Review Committee are to inquire into the role of the tax system in the promotion of inclusive economic growth, employment creation, development and fiscal sustainability.
The committee will also have to take recent domestic and global developments into account, and particularly the objectives of the National Development Plan, Treasury said in a statement.
The committee will make recommendations to the Minister of Finance. Any tax proposals arising from these recommendations will be announced as part of the normal budget and legislative process, but will first be subject to the normal consultation process and Parliamentary oversight.
According to the statement, the committee will need to focus on the following areas:
1) Examine the overall tax base and tax burden including the appropriate tax mix.
2) Analyse the impact of the tax system in the promotion of small and medium size businesses.
3) Review the corporate tax system with specific focus on its efficiency, tax avoidance, tax incentives to promote developmental objects and the average effective corporate tax income tax rate in the various sectors of the economy.
4) Assess whether the current mining tax regime is appropriate.
5) Assess the various elements of taxation within the financial sector.
6) Assess VAT with a specific focus on efficiency and equity.
7) Evaluate the impact of e-commerce.
8) Analyse the progressivity of the tax system and the role and continued relevance of estate duty to support a more equitable and progressive tax system.
9) Evaluate proposals to fund the National Health Insurance.
10)Evaluate the legislative process in order to promote simplicity and protect the tax base.
Treasury also noted that the committee should take broad tax policy objectives, into account. These include raising revenue to fund government expenditure as well as social objectives.