17 August 2015 Media Statement - clarification of
certain points in VAT First Interim Report
- Visit the Library on this site for progress to date and
published reports of the DTC
On 17 July 2013 the Minister of Finance, Mr Pravin Gordhan, announced the
members of the Tax Review Committee (the Committee) as well as the Committee’s
This gave effect to the Minister’s previous announcement in February
2013 when he tabled the 2013/14 Budget that government will initiate a
tax review this year “to assess our tax policy framework and its role in
supporting the objectives of inclusive growth, employment, development
and fiscal sustainability”.
It was decided at the inaugural meeting of the Committee on 25 July 2013
that the Committee will be known as The Davis Tax Committee (DTC).
Background to the review of the tax system
The South African tax system has changed significantly since the
recommendations of the last tax commission (The Katz Commission). The
changes to the system, arising from the recommendations, include the establishment of an independent tax
and customs administration (the South African Revenue Service), the
broadening of the tax base, and the lowering of marginal tax rates.
These, and other changes have contributed to the development of a
relatively robust and competitive tax system. Today South Africa’s tax
policy and tax administration compares favourably with those of many
developed and emerging economies.
However, given the pace of globalisation, the relatively modest economic
growth after the 2008/09 economic recession, and the significant social
challenges such as persistent unemployment, poverty and inequality,
there is a need to review what role the tax system can play as part of a
coherent and effective fiscal policy framework in addressing these
challenges. In line with local and international priorities at the
moment, there is an immediate need to address concerns about the growth
of small businesses as well as base erosion
and profit shifting (BEPS), in the context of corporate income tax,
as identified by the Organisation for Economic Co-operation and
Development (OECD) and the Group of Twenty (G20).
The Committee will operate on the basis of various sub-committees
dealing with specific items in the
Terms of Reference (TOR).
Each sub-committee will stipulate a date by which submissions must be
received from all stakeholders. Based on wide consultation and submissions received, each sub-committee will prepare an interim report
for the approval of the Committee as a whole and subsequent submission
to the Minister of Finance. The Minister of Finance will determine
any further steps to be taken with regard to each interim report.