A critical analysis of the desirability and efficacy of secondary tax on companies in South Africa
|Skuy, Adrian Gary
|This thesis debates the issue of whether Secondary Tax on Companies is a desirable and efficacious tax and whether it is compatible with other government policies and programmes. Secondary Tax on Companies is a tax imposed on resident companies and close corporations, currently at the rate of 12.5%, on dividends declared or deemed to be declared by the company to its shareholders. It has proved to be a deeply contentious form of tax in many quarters although it has been declared to be a non negotiable tax as far as the government is concerned. It has been held by many authors that this tax inter alia distorts the financial decision making process and inhibits investment in South Africa. It was concluded by the writer that Secondary tax on Companies is probably not compatible with other important government programmes such as Black Economic Empowerment and employment creation, as well as contributing to South Africa’s uncompetitive corporate tax rate. It was therefore concluded that Secondary tax on Companies should be gradually phased out.
|Secondary tax on companies
|A critical analysis of the desirability and efficacy of secondary tax on companies in South Africa