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Article

19 Apr 2015

Author:
Anne Crotty, Times Live (So. Africa)

So. Africa: NGO submission to tax commission calls for tougher stance on tax avoidance

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'The cost of companies' efforts to avoid paying tax', 19 Apr 2015: Shifting profits to low-tax jurisdictions not only erodes South Africa's tax base, it erodes the base for paying living wages to employees…This is the thrust of the argument by…Alternative Information & Development Centre (AIDC) in its submission to the Davis tax committee. The committee, headed by Judge Dennis Davis, is examining factors that may be eroding the South African tax base…Last [year]…AIDC…released a report detailing how mining companies use "transfer pricing" to minimise their tax liabilities…The AIDC said Lonmin - as with many mining companies - has used sales commissions, legal services and management fees to erode its South African profits. These fees and commissions are paid to entities outside South Africa…The AIDC…called on the Davis committee to enforce tougher reporting standards on companies operating in South Africa…[as] low levels of disclosure enabled companies to shift their profits and evade tax without being detected…

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