THE head of tax services at Deloitte has asked that South African legislators take heed of Australia's move to do away with carbon taxes.
Nazrien Kader was commenting on news that the carbon price mechanism is due to be dismantled in Australia. Commentators in South Africa have been critical of the Treasury's policy paper on carbon tax‚ due to be implemented by January 2015‚ saying it is complicated and that the process is being rushed without proper consultation.
Kader was reacting to the announcement by Tony Abbott‚ Australia's new prime minister‚ that his country was open for business and that the carbon tax and controversial 30% tax on mining profits would be scrapped.
However‚ the effects of a carbon tax in South Africa are due to be examined by a committee chaired by Judge Dennis Davis.
The committee has been tasked with reviewing the South African tax system in terms of international tax trends‚ principles and practices.
The committee has also been mandated to examine the effect of tax on the promotion of small and medium- sized businesses‚ including analysing tax compliance costs‚ streamlining tax administration and simplifying tax legislation.
Patricia Williams‚ head of the new tax dispute resolution and controversy management division at Deloitte‚ said South Africa kept implementing tax legislation‚ but was then being forced to introduce retrospective changes.
She said there had been inadequate consultation on the implementation and implications of a carbon tax.
"Recently announced measures to address base erosion and profit shifting will have a much bigger impact on tax revenue in future. Why stifle business with additional layers of taxes?"
Williams warned the abolition of carbon taxes in Australia may result in the shifting of multinationals away from South Africa and towards Australia‚ if carbon taxes were implemented in South Africa in an "unwise manner". – With Bloomberg‚ Financial Times