Pretoria – Finance Minister Pravin Gordhan has appointed Judge Dennis Davis to chair an eight-member tax review committee panel that will be tasked at looking at how revenue generated by the SA Revenue Service (SARS) can be used to improve the economy.
The appointment follows Gordhan’s announcement when he tabled the 2013/ 14 budget in February that he would set in motion a process of reviewing the current tax regime to “assess our tax policy framework and its role in supporting the objectives of inclusive growth, employment, development and fiscal sustainability”.
Speaking to journalists at SARS’s Linton House in Brooklyn, Pretoria, on Wednesday, Gordhan said the review was not an “overhaul” of the current tax regime, but that the review was necessary to ensure South Africa’s tax system keeps up with the ever changing tax environment.
“The committee will take into account recent domestic and international developments and, particularly, the long term objectives of the National Development Plan.
“The committee is advisory in nature, and will make recommendations to the finance minister.
“The finance minister will take into account the report and the recommendations and will make any appropriate announcements as part of the normal budget and legislative processes.
“As with all tax policy proposals, these will be subject to the normal consultative processes and Parliamentary oversight once announced by the finance minister.”
Davis is a currently a serving judge of the High Court of South Africa and a tax law professor at the University of Cape Town.
He was a member of the Commission of Inquiry into the tax structure of South Africa, also known as the Katz Commission in 1996 that produced recommendations that gave birth to the SARS.
He was also a technical advisor to the Constitutional Assembly where the negotiations for South Africa’s interim and final constitutions were formulated and concluded.
Gordhan said on Wednesday the reason he chose Davis was because based on his good work during the Katz Commission, he had confidence that he would deliver good results.
Central to the review of the country’s tax regime, Gordhan said, would be to ensure that the system is able to boost revenue collection to assist the government fund its key policy objectives.
These will include, amongst others, funding government’s priority programmes like the National Health Insurance (NHI) and the government’s infrastructure development plan aimed at creating jobs.
Gordhan also outlined the terms of reference that the committee would operate under, which includes evaluating the current tax system against internationally accepted standards, principles and practices and improving tax compliance and doing away with base erosion.
With this, Gordhan said the upcoming G20 meeting of finance ministers in Moscow in Russia, which takes place on Friday, will also discuss ways of ensuring that there is coordination between member countries to ensure that regulatory framework is in place to stop companies from evading paying tax by shifting investments to offshore accounts.
Gordhan said after the democratic government reviewed the tax structure 20 years ago, this review was necessary to update the country’s tax practices.
While he said he expected a report back from the committee in a year’s time, Davis said he aimed to forward a draft report to the Finance Ministry by the end of the year. – SAnews.gov.za
