Just 35 companies pay 18% of SA's total tax take
The survey participants contributed a total of R152bn in taxes to the economy in 2013 compared with R143bn in the previous year. The largest part of the contribution is from taxes collected on behalf of the state such as value-added tax (VAT) and pay-as-you-earn (PAYE) tax‚ which amounted to R103bn of the total.
Osman Mollagee‚ a tax partner at PwC in Johannesburg‚ said the average tax rate of all the participants was 30.9%‚ which was on par with some of the other countries where similar surveys were conducted. The average total tax contribution of the 35 participants as a percentage of their turnover was 10.6%‚ compared with 16% in the previous study.
The total taxes borne by participants came to R48.6bn for the survey period compared with R49.9bn in the previous survey period.
Taxes borne are the actual cost to the company with the biggest tax borne being corporate income tax at 79% of the tax cost of companies.
Taxes collected are not an actual cost to the company‚ but it is an unpaid service to the South African Revenue Service. The contribution by VAT was 20% of the total taxes collected and PAYE accounted for 28%.
The data provided by the companies was for financial year-ends between April 2012 and the end of March this year. Almost 50 companies were invited to participate‚ but only 35 were prepared to take the time. The rest said they were inundated with work because of compliance and audit issues with the SARS.
Mollagee said at a briefing in Johannesburg that the transparency of tax contributions is important especially in relation to the appointment of the tax review committee appointed by Finance Minister Pravin Gordhan. The committee will review the tax mix of the tax system and whether it is appropriate to meet the developmental needs of the country.
PwC Africa's tax leader‚ Paul de Chalain‚ said in a statement released last week that the business community across the world had embarked on corporate governance reforms in the wake of the recent global financial crisis.
"Transparency had become a constant theme‚" he said. "The total tax contribution framework provided a robust approach to ensuring transparency in the area of tax," he added.