Tax benefits much needed

The Finance Ministry has been urged to use the country’s tax structures more effectively to...

The tax man is calling.

The Finance Ministry has been urged to use the country’s tax structures more effectively to attract foreign investment.

Consultants and economists have been monitoring the markets closely ahead of Finance Minister Trevor Manuel’s budget speech next week.

Deloitte’s Tax Director Nazrien Kader suggested that tax benefits may boost a surge in foreign investment.<?xml:namespace prefix="o" ns="urn:schemas-microsoft-com:office:office"?>

“Tax trade reductions for specific types of industries, has also been very popular globally. <?xml:namespace prefix="st1" ns="urn:schemas-microsoft-com:office:smarttags"?><country-region w:st="on"><place w:st="on">South Africa</country-region> has never offered anything of that magnitude even though it has identified critical industries such as manufacturing and tourism towards which government is channeling incentives,” Kader said.

Kader claimed that the inefficient processing of investment queries was leading to significant losses.

“The primary criticism has been that the time lag between the time that an incentive has been announced, to the time that the rules are actually put in place, to the time that the incentive is actually implemented, is too long. So investors either loose interest or fail to qualify because they inadvertently do something that strikes them off that list,” Kader commented.