Treasury changes tac on tax incentives

There is bigger story beyond the sun setting on the s12J incentive. National Treasury indicated in the 2020 budget that government is reducing the number of tax incentives in the tax system, and the 2021 budget has reminded taxpayers that four further tax incentives are scheduled to lapse on reaching their respective sunset dates. Treasury noted that: “Tax incentives often undermine the principles of a good tax system, which should be simple, efficient, equitable and easy to administer.” It raises the question: Do incentives have a role? Is a lower tax rate the panacea for investment attraction?
Michael Avery spoke to Chris Axelson, Chief Director: Economic Tax Analysis at National Treasury, & Duane Newman, joint managing director at Cova Advisory