Chicago Journal of International Law


This essay briefly presents perspectives on certain structural features of the South African income tax system. Most of the comments are directed at steps that can be taken to enhance South Africa's economic growth and job growth. Given that the unemployment rate among South Africa's non-White population exceeds the unemployment rate in the United States during the Depression, it is crucial that South Africa adopt tax and other policies that will lead it to higher economic growth. The importance of the tax system in generating growth was recognized by President Thabo Mbeki in a speech he gave on July 17, 2000 at a meeting of the African National Congress ("ANC"), the dominant political party in South Africa. At this meeting, President Mbeki proposed that "foreign companies be offered tax breaks and other incentives to invest in manufacturing plants in South Africa." South Africa currently does not have in its Income Tax Act investment incentives, such as investment tax credits, jobs tax credits, research and development credits, and empowerment zones, each of which is or has been employed in the United States. I believe that South Africa should carefully craft tax incentives to promote both savings and investment, and I set out a broad outline of a set of such incentives in Section II(D) below. These incentives would be consistent with the recent decision by the ANC to "refocus its economic policy priority from strict macroeconomic management to growth targets like jobs and investment".