South African Finance Select Committee Looks Into Provincial Taxation

by Robert Lee, Tax-News.com, London

12 October 2001

South Africa's national council of provinces' select committee on finance has launched a survey so that its findings can equip the government with as much information as possible to help it decide whether or not to permit provinces to raise their own revenue through taxes.

According to the country's constitution, provinces have the powers to charge 'taxes, levies and duties other than income tax, VAT, general sales tax, rates on property or customs duties; and flat-rate surcharges on the tax bases of any tax, levy or duty that is imposed by national legislation, other than the tax bases of corporate income tax, VAT, rates on property or customs duties,' but they can not 'prejudice national economic policies or the national mobility of goods, services, capital or labour.'

Chairman of the committee, Dorothy Mahlangu, has confirmed that the national treasury and think-tank Idasa have briefed the committee on the recently approved Provincial Tax Regulation Process Bill with particular focus on understanding how provincial taxation can affect the richest and poorest areas. Talks to discuss the legislation in the provinces will take place within the next two weeks and the Revenue Service will meet with the committee to clear up any confusion on provincial taxes that it might have.

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