Flat tax rates for you?

by oneafrikan on March 10, 2005

I came accross a post that talks about flat tax rates, and what effect that could have for business, so I followed the links through to their logical conclusion:

_ Romania goes flat
_ How Much Tax Would You Like to Pay?
_ They’re gaining on us

And it struck me how much this is a factor when considering the rate of foriegn investment into South Africa, as well as how people within Southern Africa view their economic opportunities. Now, I’m no expert on tax, but it seems to make sense. If you’re looking to invest somewhere to do some outsourcing / offshoring, you’re gonna go where you find the best deal. So, if some countries are harder to do business in, then it follows that business leaders are going to choose to go where it is cheaper – simple.

I’m going to ask my mate Walter what the tax rates are in South Africa ‘cos I’m curious.
I know I’m paying too much personal tax here in the UK, and know that business would prefer lower tax rates. But can the gov. afford that?
I also know that the South African government is being quite proactive about attracting investment, so that would be something interesting to find out more about.
I’m also pretty sure that their corporate tax rates are pretty high (on a thumb suck scale) and so end up wondering whether they realise how/whether that out-competes them immediately? What kind of deficit do they have?
I know that in the work that I do, we compete on price with the likes of India and Romania – paying less tax makes them even more competitive.

So these are my thoughts, and right now, I’m wondering whether you have any thoughts on the matter?

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