Will Gordhan provide solutions for group taxation?
Updated | By Anelisa Kubheka
An analyst says it's going to be a tough balancing act for Minister Pravin Gordhan as he unveils plans to address the country's debt and budget deficit - while also focusing on economic growth and job creation.
Gordhan will today deliver his 2017 Budget to Parliament.
Tax director, Brigitte Keirby-Smith, believes we could hear more about "group taxation".
She says this kind of taxation applies to corporate tax payers and allows a group of related companies to be taxed as a group.
ALSO READ: Spotlight on overspending of public funds in budget speech: economist
"We don't have anything that allows companies within a group to do that set-off of tax profits against tax loss. Unfortunately, if you have a company that has a big tax loss but there's another that's paying tax within the group, there is is no ability in our existing legislation to get relief. So, one company may pay a large amount of tax while the other may carry a big loss," she said.
In 2013, the Davis Tax Committee was established to assess the country's tax policy framework. It established a Corporate Income Tax Sub-Committee in December, calling for public comment on group taxation.
ALSO READ: Significant tax increase looming: Roodt
Meanwhile, economist Dawie Roodt says it is expected that Gordhan will make some adjustments to certain taxes - including that of personal income tax and taxes pertaining to petrol, alcohol and cigarettes. Roodt says however, it's crucial for company tax to stay intact as this will compromise investment opportunities for South Africa.
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