Weathering the storm*

Transcription

1 Weathering the storm* *connectedthinking PwC

2 Market capitalisation of banks Citigroup 255 HSBC 215 JP Morgan 165 RBS 12 0 UBS Goldman Sachs 100 Societe Generale 80 Deutsche Bank 76 Credit Agricole 67 Morgan Stanley 49 June 2007/ # Jan 2008 January 2009 ABSA # Standard # Firstrand # 12.5 Nedbank #

3 Change in the market capitalisation of selected stock markets 64% 56% 50% Source: World Federation of Exchanges 46% 45% 41% 41% 41% 39% 38% 34% 33% 26% 23% 20% Shanghai SE Bombay SE Hong Kong Exchanges The Stock Exchange Deutsche Börse Tokyo SE NYSE Group Korea Exchange Bursa Malaysia Egyptian Exchange Australian SE London SE Mexican Exchange Buenos Aires SE JSE 70% 60% 50% 40% 30% 20% 10% 0% Annual % Change: Dec 2007 to Dec 2008

4 Changes in house prices US Britain Ireland New Zealand Denmark Japan South Africa Germany China Australia 4% 2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% Annual % Change in Average Nominal Prices

5 Paying Taxes in South Africa

6 A global comparison of tax compliance Findings of the World Bank and PricewaterhouseCoopers study show that South Africa was ranked 23 out of the 178 countries for ease of compliance

7 The results for South Africa 2009 (2008) Result Rank Total Tax Rate 34.2% (37.1%) 51 (62) Hours to comply 200 (350) 73 (131) Number of payments 9 (11) 16 (24) Overall ranking 23 (61)

8 Cost The Total Tax Rate ranking A reduction of 2.9% improved the ranking by 11 places A further 5% reduction in the TTR could improve the ranking for South Africa by 20 places Number of countries Vanuatu Rank TTR South Africa Rank Gambia Rank 178 >100

9 Time the hours to comply ranking A reduction in the number of hours of 150 improved the ranking by 58 places A further reduction in the hours to comply by 50 could improve the ranking for South Africa by 21 places >1000 Number of countries Maldives Rank 1 South Africa Rank 23 Brazil Rank 178 Hours to comply

10 Total Tax Contribution 2007/8 Survey Results

11 Average number of taxes Taxes borne 14 The average number of taxes borne is /8 The average number of taxes borne is 8.7 Number of companies reporting data Number of taxes reported (value or zero)

12 Average number of taxes Taxes collected The average number of taxes collected is 3.2 Number of companies reporting data Data Quality 2007/8 Taxes collected Number of taxes reported (value or zero)

13 Tax economics

14 GDP over 15 years R million GDP

15 Tax as a percentage of GDP 30.00% 25.00% 20.00% 15.00% Tax/GDP% 10.00% 5.00% 0.00%

16 Main sources of tax revenue Customs and excise Other Individual tax Other Customs and excise Individual tax VAT VAT Corporate tax and STC Corporate tax and STC

17 Growth in registered taxpayer base Individuals Companies VAT vendors PAYE employers Source Tax Statistics SARS and National Treasury

18 Corporate tax rates 35% 30% 25% 20% 15% Normal tax STC 10% 5% 0%

19 Reducing the inflationary impact for individuals Tax threshold <65 Tax threshold >65 Maximum rate threshold

20 Which income group received the largest cash benefit? Tax saving R 100,000 R 250,000 R 500,000 R 1,000,000

21 Which income groups contribute the most tax? 80% 70% 60% 50% 40% 30% 20% Assessments Tax assessed 10% 0% <R R R >R300000

22 Tax administration has changed Formation of consolidated revenue service Large business centres in major areas Audit and risk focused Specialised units Revenue targeting Stricter enforcement New GAAR and reportable arrangements Advance ruling mechanism Online filing

23 Tax law and practice has changed Base broadening Worldwide tax CFC imputation Capital gains tax Skills development levy Plastic bag levy Electricity levy Mineral royalties Exchange differences Interest recognition Executive share schemes Transfer pricing VAT on financial services Administrative penalties Relief Group relief Learnership allowances Broad-based employee share schemes Building allowances Small business relief Micro business simplification Venture capital companies Strategic industrial projects Environmental investment Wider tax treaty network Participation exemption

24 2009 amendments

25 Tax highlights Corporate tax rates unchanged Inflationary relief for individuals CGT reform for primary residences Mineral royalties deferred Environmental fiscal reforms STC to be replaced late 2010 VAT rate remains at 14%

26 Tax highlights (continued) Travel allowances deemed mileage to go in 2010/11 Deduction to be allowed for post-retirement medical aid expenditure by companies Additional 15% deduction for energy saving investment Exemption or CGT treatment for CER certificate proceeds

27 Indirect tax New and increased environmental levies - Plastic bag levy increased from 3c to 4c - Incandescent light bulbs to be taxed at R3 per bulb - CO 2 emissions factored into ad valorem vehicle taxes - International air passenger departure tax increased: R150 (R120) and R80 (R60) for SACU destinations Fuel and RAF levy increases: - Petrol 40.5c/litre - Diesel 41.5c/litre Increased excise duties on tobacco and alcohol

28 Taxes: Individuals What s in it for me? Taxable income 2009/ /2009 R R8 244 R9 720 R R R R R R R R R R R R

29 The taxpayer in court The taxes and issues - Income tax 14 - STC 2 - VAT 2 - Other 7 The score - Taxpayer 9 - Tax collector 16 Notable issues Attachment of assets VAT evasion Punitive costs Trading stock Tax avoidance

30 SARS developments efiling Automated data capture Employees tax recons and IRP5 forms Tighter filing deadlines this year Notified administration initiatives More frequent employees tax recons Extension of enforcement to UIF and SDL Audit focus Tough times Tough measures Audit intensity may increase Focus issues - Trading stock - Zero-rated supplies to nonresidents