Mining tax changes not expected to be clarified in 2014/15 Budget
JOHANNESBURG (miningweekly.com) – As changes to South Africa’s mining tax system were still expected, it would not impact on the 2014/15 Budget to be announced by Finance Minister Pravin Gordhan on February 26, Deloitte associate director Alex Gwala said on Wednesday.
Addressing the media at a pre-Budget event hosted by Deloitte, Gwala explained that the Davis Committee, which was mandated by Gordhan to assess the country’s tax systems and come up with recommendations to ensure that in future the tax policy framework supported economic growth, job creation, development and fiscal sustainability, was also considering the country’s mining tax legislation to determine whether it was still relevant in terms of revenue collection.
He stated that government had not yet made any decisions on possible changes to mining tax legislation and said the committee's findings would be independent.
The Davis Committee’s process was still ongoing and there was no indication of when a decision on the mining tax system was expected.
“However, once the review has been finalised, there are definitely going to be changes within the mining legislation to increase taxes, either through new taxes or new resource rents,” Gwala said.
He added that the method most likely to be favoured by government would be the introduction of a rent resources tax (RRT), which was originally proposed at the African National Congress conference during December 2012.
“The RRT is similar to the controversial minerals resource rent tax (MRRT) that was introduced in Australia in 2012. However, Australia subsequently moved to abolish the MRRT on coal and iron-ore.
“Should the South African government decide to introduce the RRT, it can be expected that their decision could be influenced by what transpired in Australia,” Gwala said.
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