This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. Find out more here.  
  • Delicious




South Africa To Tackle Tax In Bid To Become Major Offshore Centre

Mandy Robinson, Tax-news.com, London

10 November 2000

South African Finance Minister Trevor Manuel stated this week that South Africa is likely to introduce tax reforms in an attempt to develop the country as a major offshore financial centre for sub-Saharan Africa. Although he declined to elaborate on the details, Mr Manuel did confirm that the cabinet had approved the proposal in principle.

At a launch of a new name and logo for the Johannesburg bourse, the Finance Minister declared: 'We believe that South Africa is in a position to compete with London to intermediate the financial flows that will increasingly drive African economic development.' The bourse is now renamed the JSE Securities Exchange South Africa.

For some time JSE officials have been urging the government to remove the 2.5 per cent tax which can double the cost of transactions on the market and puts the JSE at a disadvantage when compared to other global stock exchanges. They have also complained about the finance ministry's decision to introduce capital gains tax in 2001 because it could put a strain on the liquidity of the JSE.

At the unveiling of the JSE's new corporate identity, chairman Geoff Rothschild called for the lifting of exchange controls which would help attract more investment and discourage South African companies from seeking offshore listings.

Executive president of the exchange, Russell Loubser, also complained at the departures of blue-chip companies, including miner Anglo American plc, and Billiton and South African Breweries who have taken their primary listings to London with a negative impact on trading volumes. Only 40 per cent of the exchange's listed companies are traded on any given day. Consequently, Mr Loubser says, the exchange has discussed the potential for other bourses, such as the London and Paris Stock Exchanges, to take an equity stake in the JSE which will enable it to compete on an international scale.


Mr Manuel added: 'We intend to investigate tax changes that may be necessary to develop our country as an offshore financial centre for the registration of holding companies, and will recommend that the Financial Markets Advisory Board investigate the best possible regulatory framework for our financial services sector.'

.

 

 






Write a comment