Companies shifting profits to avoid paying tax – Gordhan

2013-05-14 13:10

Too many big companies are shifting their profit centres to parts of the world where they can avoid paying tax, Finance Minister Pravin Gordhan has said.

He told Parliament’s standing committee on finance today he had encountered a growing optimism around the world when it came to South Africa and the continent as a whole.

“That optimism is about new resource discoveries. It’s about the revenue from those resources being used in a responsible way,” Gordhan said.

The “resource boom” was leading to a new fiscal base for many countries to work from. Multinational companies were asking Africa to build fiscal capacity.

“At the same time, these very businesses are the ones that participate in ... tax avoidance, which undermines the fiscus as well.”

Gordhan warned against negative messages from opposition parties, analysts, and the media emerging from within South Africa.

“There are so many good things happening, but the narrative being told is a negative one.”

He suggested “changing the South African narrative” to portraying the country as a great investment destination.

Gordhan said he had spent the past few months selling South Africa as a favourable investment destination, and had received positive feedback.

“If we compare ourselves to certain parts of the world where you have gunfights taking place all over the show, shootings taking place all over the show, incursions taking place all over the show, we don’t have that in South Africa.”

Gordhan called on opposition parties to play their role and not add to perceptions that were increasingly being viewed as fact.

“We’ve got to do a lot more, despite our political differences, and the fact that there’s an election coming, to demonstrate that we as South Africans have confidence in our ability to take this economy onto a new trajectory,” he said.

“We can speak a language that on the one hand allows us to debate our different views, but on the other hand projects a national positive narrative.”

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