Johannesburg - SA's tax rate is not out of line with other jurisdictions, a new survey has shown.
PricewaterhouseCoopers (PwC) on Monday released its Total Tax Contribution (TTC) Survey for large South African companies, which showed a total tax rate of 33% for these companies.
According to Paul de Chalain, tax leader of PwC in SA, similar surveys conducted in other countries showed the total tax rate in SA was not out of line with other jurisdictions.
Canada had the lowest total tax rate at 27% and Belgium, at 52%, was the highest. "South Africa, at 33%, compares closely with the Netherlands, at 31%, and India and Australia, both at 35%," he said.
On average, for every R1 of corporate income tax borne, participating companies collected and paid over taxes of R1.60. The survey showed that SA's larger companies contributed R134bn to the fiscus in their financial years up to a March 31, 2009 cut-off.
The R134bn consisted of R61bn of their own taxes borne, and a further R73bn collected on behalf of the revenue authorities. Despite the recession, the country's largest companies continued to contribute a significant proportion of the country's overall tax receipts, said PwC.
It also emphasised that larger companies paid many other business taxes apart from corporate income tax and acted as important collecting agents for the South African Revenue Service (Sars).
"The services that large companies perform as unpaid tax collectors represent a valuable contribution to the fiscus and the national economy," the PwC director responsible for the South African TTC initiative, Charles de Wet, said in a statement.
Participating companies in the current survey reported a decline in profitability as compared to 2008, with profits being about 14% lower on average.
Nevertheless, taxes borne by these 45 companies increased 12%, the survey found.
They paid taxes on income and profits (ie corporate income tax, mining taxes, secondary tax on companies, and tax on
retirement funds) in excess of R50bn - more than 27% of government's total receipts from these sources.
An additional 34 cents in other business taxes was borne for every R1 of corporate income tax incurred.
Taking into account these other business taxes, such as customs and excise duties, irrecoverable value-added tax, fuel-related and transaction taxes, the total taxes borne by participating companies exceeded R61bn. This represented almost 10% of total estimated government taxation receipts from the relevant taxes, according to the survey.
According to the survey, about 36% of the R73bn collected and paid over to Sars was in respect of employment taxes (pay-as-you-earn and the Unemployment Insurance Fund levy), with three other large sources - excise duties, fuel levies, and value-added tax - each accounting for about 20%.
- Sapa