During the 2020 budget speech, it was announced that National Treasury is looking to broaden the corporate income tax base.
One of the proposed mechanisms would be a restriction on the use of loss carryforwards, limited to 80% of taxable income. The additional revenue generated from this proposed measure would be used to allow for a reduction to the rate of corporate income tax in the “medium term”—possibly reducing the current 28% tax rate and thus following the corporate tax rate reduction trends in other countries.
The amendment is intended to be effective for years of assessment beginning on or after 1 January 2021.
Read a March 2020 report [PDF 395 KB] prepared by the KPMG member firm in South Africa
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