Secondary Tax on Companies

2011-02-24 00:00

AFTER more than four years in the pipeline, a date for the implementation of the transition from the Secondary Tax on Companies (STC) to the dividend tax on shareholders was finally announced by Pravin Gordhan yesterday.

Muneer Hassan, South African Institute of Chartered Accountants’s (SAICA) project director of tax told The Witness this is a positive development as businesses need to plan ahead — particularly when it comes to matters relating to tax.

He said the effective date is April 1, 2012.

Hassan expressed concern over the proposed funding mechanisms for the National Health Insurance (NHI) system. Gordhan said funding options include taxes on payrolls, an increase in the VAT rate or a surcharge on individual’s taxable income.

“This is a definite negative for us as SAICA and adds to the tax burden of South Africans, from individuals to companies.”

He added that Gordhan noted further details on South Africa’s carbon tax regime would be unveiled shortly.

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