AFRICAN DEVELOPMENT BANK

Personal income tax in South Africa draws on a narrow base of higher income earners; recent rate increases have yielded less than forecast.The widely respected Revenue Service Commissioner Edward Kieswetter has warned that further income tax hikes risk driving more people to avoid tax and move their businesses abroad.Income tax has risen sharply over the past two decades and is much higher than the average in the Organisation of Economic Cooperation and Development member states (OECD).South Africa's VAT rate is lower than the European Union average of 20% but still higher than the 10% rate in Australia and South Korea and 7.5% rate in Nigeria.Under Godongwana, the Treasury wants to shift SA's tax structure to what it sees as a pro-growth model.But its plans have worsened tense relations between disciplinarians in the Treasury and the rest of government and ANC.