THE top 50 companies spent R144,8m to comply with the tax laws last year, says a new study released by PricewaterhouseCoopers (PwC) yesterday.
... This included R64,2m on salaries and related overheads and R80,6m paid to external tax service providers.
Charles de Wet, the PwC director responsible for the South African total tax contribution project, said: “Tax compliance costs include more than just the cost of submitting a tax return, and refer to the total cost incurred by a company to meet its obligations with regard to South African taxes.” The study included a broad spectrum of companies from the retail, manufacturing and financial services sectors. Companies such as Anglo American, Harmony, Massmart, Netcare, Shoprite Checkers, Unilever, Vodacom and Woolworths took part.
The companies were asked to complete a detailed questionnaire in respect of taxes paid and collected during their latest financial year that coincided with the 12 months to March last year. On average, the equivalent of 4, 4 fulltime employees per participant in the study dealt solely with tax compliance. Just over half of the time spent by employees on tax compliance was on activities relating to corporate tax (50, 3%), 18 ,9% of time was spent on employment taxes, and 13, 2% on value-added tax (VAT).
Each participant spent R1 ,6m on average with a variety of external tax service providers for various tax compliance services. Just over half of the companies (57%) believed that corporates were being unduly targeted for cash collections by the South African Revenue Service (SARS). While 67% considered SA’s tax legislation to be highly complex, 71% of organisations rated the quality of the SARS website to be sufficient to resolve tax issues.
The data collected was reassuring from a corporate governance perspective as 86% of companies had a formal tax reporting structure to management in place, and 73% indicated audit committee involvement in the management of tax risk. Edward Kieswetter, chief operations officer at SARS, said last week at the inter-American centre of tax administration technical conference, that SA was very dependent on its large businesses for direct and indirect taxes.
Between 60% and 70% of revenue was collected from large businesses every year, Kieswetter said. For the financial year ending March 31, SA’s large business centre (which caters for such organisations) managed to collect in excess of R203bn, representing more than 35% of total revenue collected. The centre carried out 2 307 audits yielding an extra R6, 8bn in assessments. “There was a perception that large companies did not pay as much tax as they should. Such perceptions are seldom supported by empirical data and are frequently based on generalisations, speculation and innuendo,” said De Wet.
Thursday, October 9, 2008
ONE OF THE MANY SUCCESS STORIES WITH OUR INVOLVEMENT... - Business Day
This is partially offset by the release of a tax provision of R102.7 million following the settlement with Sars which was announced in December 2007 and the accrual of an estimate of the amount to be received from insurance relating to the fire in the United Kingdom. ONE OF THE MANY SUCCESS STORIES WITH OUR INVOLVEMENT...
Bidvest pauses for thought September 29, 2008 Johannesburg - South African industrial services group Bidvest said on Monday that it is to evaluate its bid for 30 percent of Nampak following the release of a trading update and information to Nampak shareholders regarding the pro rata offer released on Friday.
Bidvest on Monday referred shareholders to its offer of September 17 to acquire up to 30 percent of the Nampak ordinary shares and the announcement by Nampak released on the stock exchange news service on September 26 regarding a Nampak trading statement and information to Nampak shareholders regarding the pro rata offer. "Bidvest draws the attention of shareholders to the suspensive condition to the pro rata offer which relates to there being no material adverse change in either market conditions or the financial position of Nampak which comes to the attention of Bidvest. "Bidvest believes that the Nampak September 26 announcement contains information which may constitute a material adverse change.
"Accordingly, the information in that announcement, and subsequent discussions with Nampak management in relation to the matters contained therein, will need to be evaluated by Bidvest," it said. Once the evaluation is complete, Bidvest will decide whether to proceed with the pro rata offer at the price, or at all. A further announcement in this regard will be made in due course, it said.
On Friday Nampak said that for the financial year ending September 2008 its headline earnings per share (HEPS) is expected to be between 0 percent and 10 percent lower than the 184.6 cents per share for the financial year ended September 2007. Basic earnings per share (EPS) is expected to be between 60 percent and 80 percent lower than the 181 cents per share for the financial year ended September 2007.
These differences are mainly attributable to a strategic review coupled with a revision of future cash flows relating to the Cartons Europe business resulting in a decision to close the division's Short Run site at Crewkerne in the UK and to fully impair goodwill relating to the Cartons business on the continent and a fire at the group's Healthcare UK Thorpe site that destroyed the entire factory resulting in certain consequential costs including an impairment of all goodwill relating to the Healthcare UK business.
This is partially offset by the release of a tax provision of R102.7 million following the settlement with Sars which was announced in December 2007 and the accrual of an estimate of the amount to be received from insurance relating to the fire in the United Kingdom.
Bidvest pauses for thought September 29, 2008 Johannesburg - South African industrial services group Bidvest said on Monday that it is to evaluate its bid for 30 percent of Nampak following the release of a trading update and information to Nampak shareholders regarding the pro rata offer released on Friday.
Bidvest on Monday referred shareholders to its offer of September 17 to acquire up to 30 percent of the Nampak ordinary shares and the announcement by Nampak released on the stock exchange news service on September 26 regarding a Nampak trading statement and information to Nampak shareholders regarding the pro rata offer. "Bidvest draws the attention of shareholders to the suspensive condition to the pro rata offer which relates to there being no material adverse change in either market conditions or the financial position of Nampak which comes to the attention of Bidvest. "Bidvest believes that the Nampak September 26 announcement contains information which may constitute a material adverse change.
"Accordingly, the information in that announcement, and subsequent discussions with Nampak management in relation to the matters contained therein, will need to be evaluated by Bidvest," it said. Once the evaluation is complete, Bidvest will decide whether to proceed with the pro rata offer at the price, or at all. A further announcement in this regard will be made in due course, it said.
On Friday Nampak said that for the financial year ending September 2008 its headline earnings per share (HEPS) is expected to be between 0 percent and 10 percent lower than the 184.6 cents per share for the financial year ended September 2007. Basic earnings per share (EPS) is expected to be between 60 percent and 80 percent lower than the 181 cents per share for the financial year ended September 2007.
These differences are mainly attributable to a strategic review coupled with a revision of future cash flows relating to the Cartons Europe business resulting in a decision to close the division's Short Run site at Crewkerne in the UK and to fully impair goodwill relating to the Cartons business on the continent and a fire at the group's Healthcare UK Thorpe site that destroyed the entire factory resulting in certain consequential costs including an impairment of all goodwill relating to the Healthcare UK business.
This is partially offset by the release of a tax provision of R102.7 million following the settlement with Sars which was announced in December 2007 and the accrual of an estimate of the amount to be received from insurance relating to the fire in the United Kingdom.
Rules of engagement
In this article I continue along the time frame to a place where the taxpayer has now effectively been compelled to give information, after SARS have satisfied the transparency, impartiality, without bias, accountability and professional conduct points.
In the first article
Our Constitution PROVIDES. You cannot be placed in a situation, particularly where our system of law is adversarial, where you are compelled to give evidence, both oral and documentary, that may be used against you to impose any criminal sanction for non-compliance with the provisions of the taxing statutes. Criminal sanctions would include the imposition of penalties.
What this means, is that you may be compelled to give information, documents or things to the Revenue Service. If this is then used to ultimately complete any outstanding taxes, then the Revenue Service cannot also use this information against you as evidence for a conviction or imposition of a penalty for non-compliance.
There are numerous instance where subjects have in company enquires been compelled to give self – incriminating evidence, with the … imposed by the Constitutional court: the evidence cannot be used against the subject concerned. A subject cannot be expected to provide the evidence under self-compulsion to enable the State to impose the criminal or penalty sanction. It is a fundamental right – for the State, it is the sacrifice that State makes for being able to obtain the evidence quickly, without having to launch its own independent investigation through third parties.
In that way everyone gets their fair share of retribution, and the balance is maintained in the system.
(This article is based in s35(3)(h) & (j) of the Constitution, read with s35(5) of the Constitution and report by Australian Law Commission on the admissibility of self-incriminating evidence. Reliance has also be placed on a variety of Constitutional Court and Australian cases)
In the first article
Our Constitution PROVIDES. You cannot be placed in a situation, particularly where our system of law is adversarial, where you are compelled to give evidence, both oral and documentary, that may be used against you to impose any criminal sanction for non-compliance with the provisions of the taxing statutes. Criminal sanctions would include the imposition of penalties.
What this means, is that you may be compelled to give information, documents or things to the Revenue Service. If this is then used to ultimately complete any outstanding taxes, then the Revenue Service cannot also use this information against you as evidence for a conviction or imposition of a penalty for non-compliance.
There are numerous instance where subjects have in company enquires been compelled to give self – incriminating evidence, with the … imposed by the Constitutional court: the evidence cannot be used against the subject concerned. A subject cannot be expected to provide the evidence under self-compulsion to enable the State to impose the criminal or penalty sanction. It is a fundamental right – for the State, it is the sacrifice that State makes for being able to obtain the evidence quickly, without having to launch its own independent investigation through third parties.
In that way everyone gets their fair share of retribution, and the balance is maintained in the system.
(This article is based in s35(3)(h) & (j) of the Constitution, read with s35(5) of the Constitution and report by Australian Law Commission on the admissibility of self-incriminating evidence. Reliance has also be placed on a variety of Constitutional Court and Australian cases)
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