South Africa: Technical Assistance Report-Petroleum Sector Fiscal Regime Reform-Additional Analysis for the Davis Tax Committee

August 1, 2016

Preview Citation

Format: Chicago

South Africa: Technical Assistance Report-Petroleum Sector Fiscal Regime Reform-Additional Analysis for the Davis Tax Committee, (USA: International Monetary Fund, 2016) accessed September 19, 2024

Summary

This Technical Assistance report lists key issues discussed between the IMF’s Fiscal Affairs Department (FAD) and the Davis Tax Committee regarding recommendations for tax reforms in the oil and gas sector in South Africa. It is suggested that the royalty should have a single flat rate, rather than the current variable rate formula. The 5 percent flat rate proposed in the FAD report is modest by international standards. For corporate tax purposes, the current immediate expensing of capital expenditure and the 100 percent and 50 percent uplifts for exploration and development expenditure are overly generous and will lead to both a revenue loss and a long delay before revenue is collected.

Subject: Carbon tax, Commodities, Corporate income tax, Depreciation, National accounts, Oil, Oil prices, Prices, Taxes

Keywords: Africa, Carbon tax, Cash flow, Cashflow surcharge, Corporate income tax, CR, Depreciation, Depreciation treatment, Global, ISCR, Oil, Oil prices, Payback period, Price, Price assumption, Price projection, Tax, Yield

Publication Details

Pages:

19
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2016/259
Stock No:

1ZAFEA2016003
ISBN:

9781475520286
ISSN:

1934-7685

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