Risk: ‘economic downturn could mean higher taxes’

2009-01-20 00:00

Johannesburg — A risk going forward is that the authorities take the easy route and up individual taxes again, according to the associate director of international tax and technical queries at Ernst & Young, David French.

French was speaking at a pre-Budget briefing in Johannesburg yesterday, and emphasised that a problem for the revenue authorities is that in a downturn like the one being experienced, it is easier to collect from individuals.

“The fear is that they turn to the easy route and push up individual rates again,” he said.

As for other changes to look out for, French says that SA is moving in the direction of adopting an accrual basis of accounting in government, which will help with making projections of revenue.

He explains it will also reduce the worker intensity in certain areas and free up more people to concentrate on enforcement.

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