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Johannesburg – At 28.8%, South Africa’s corporate tax is relatively high compared to countries which scored better in the World Economic Forum’s (WEF's) global competitiveness rankings.
South Africa ranked 47th out of the 138 countries, an improvement by two places, in the Global Competitiveness Report for 2016/17. The survey looked at the economy profiles of 138 of the world’s countries and ranked each country in terms of its competitiveness.
We compare South Africa's corporate tax rate to 10 of the countries with the lowest tax rates in the world to see if this affects competitiveness:
10. Singapore, ranked 2nd out of 138
The tax on profits for this country is at 18.4%. With a population of 5.5 million, the country’s gross domestic product comes to $292.7bn, or $52 887.8 per capita. The country’s GDP contribution to the world is 0.42%. The savings level is at 46% of GDP.
Some of the problem factors to doing business are linked to restrictive labour regulations, insufficient capacity to innovate, inflation levels, an inadequately educated workforce and poor work ethic in its national labour force.
9. Georgia, ranked 59th out of 138
The tax on profits for this country is at 16.4%. Georgia has a population of 3.7 million. Its GDP is at $14bn, or $3 788.6 per capita. The country’s GDP contribution to the world is at 0.03%. The savings level is at 21.7% of GDP.
Factors that impact the ability to do business in the country include its inadequately educated workforce, access to finance, inflation, inefficient government bureaucracy and inadequate supply of infrastructure.
8. United Arab Emirates, ranked 16th out of 138 countries
The tax on profits is at 15.9%. The country’s population is 9.6 million and GDP stands at $345.5bn, or $36 060 per capita. The GDP contribution to the world is at 0.57%. The country has a savings rate of 27.8% of GDP.
Factors that impact the ability to do business include its restrictive labour regulations, access to finance, inflation levels, an inadequately educated workforce and the poor work ethic of the labour force.
7. Saudi Arabia ranked 29th out of 138 countries
The tax rate is at 15% of profits. The country has a population of 31.4 million. GDP is $653.2bn, or $20 812.6 per capita. Contribution to the world's GDP is 1.48%. Savings to GDP is at 21.2%.
Problems to doing business include restrictive labour regulations, inadequately educated workforce, access to finance, inefficient government bureaucracy and poor work ethic in the national labour force.
6. Lesotho, ranked 120th out of 138 countries.
Tax on profits is at 13.6%. The country has a population of 1.9 million and GDP is at $2bn, or $1 051.6 per capita. The GDP contribution to the world is 0.01%. The savings rate of the country is 27% of GDP.
Some problems to doing business include access to finance, corruption, inadequate supply of infrastructure, an inadequate capacity to innovate and inefficient government bureaucracy.
5. Bahrain, ranked 48th out of 138 countries.
The tax in profits is at 13.5%. The country has a population of 1.3 million and GDP comes to $30.4bn. Per capita, this is $23 510. The contribution to world GDP is 0.06%. Savings come to 12.9% of GDP.
The most problematic factors for doing business include inefficient government bureaucracy, restrictive labour regulations, poor work ethic in the national labour force, inadequately educated labour force and an insufficient capacity to innovate.
4. Kuwait, ranked 38th out of 138 countries
Tax on profit is at 13%. The country’s population is 4.1 million. GDP is at $120.7bn, or $29 363 per capita. The GDP contribution to the world is at 0.25%. The savings rate is at 31.4%.
Contributors to business problems include inefficient government bureaucracy, restrictive labour regulations, corruption, poor work ethic in the national labour force and an inadequately educated workforce.
3. Macedonia, ranked 68th out of 138 countries
The tax rate on profits is at 12.9%. It has a population of 2.1 million. GDP is $9.9bn or $4 786.8 per capita. The world contribution to GDP is 0.03%. Savings to GDP is at 30%.
Problems to doing business include policy instability, access to finance, an inadequately educated workforce, poor work ethic in the national labour force and an inefficient government bureaucracy.
2. Qatar, ranked 18th out of 128 countries.
The tax on profits is at 11.3%. The country has a population of 2.4 million. GDP was at $185.4bn of GDP, or $76 576.1 per capita. The GDP contribution to the world is 0.28%. Savings to GDP is at 54.5%.
Problem factors to business include restrictive labour regulations, inflation, insufficient capacity to innovate, tax regulations and an inadequately educated workforce.
1. Brunei, ranked 58th out of 138
Tax on profits is at 8.7%. The population is 0.4 million, while GDP is $11.8bn or $28 236.6 per capita. The world GDP contribution is 0.03%.
Problems to doing business include inefficient government bureaucracy, access to financing, restrictive labour regulations, poor work ethic in national labour force and an inadequate supply of infrastructure.
How SA fared
South Africa was less affected by the commodity price falls than similar economies in the region, according to the report. The country improved in all aspects of competitiveness, both locally and internationally.
Some improvements include the quality of education; primary school enrolment was greater than 97%. However, competitiveness was negatively impacted by poor infrastructural development in transport and electricity.
Political uncertainty has diminished institutional quality. There is less transparency, with greater security concerns among business leaders who have less trust in politicians. The slowdown in the Chinese economy and exchange rate volatility have impacted growth negatively. Prospects to reduce the high unemployment rate have diminished, given the low growth forecast of 0.1%.
The country has a population of 55 million. GDP comes to $313bn, or $5 694.6 per capita. GDP contribution to the world is 0.64%. Savings to GDP is at 15.1%.
Factors influencing competitiveness include inefficient government bureaucracy, restrictive labour regulation, an inadequately educated workforce, policy instability and corruption.
