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Byline: Rob Rose
BANKS AND TAX Short on substance At the launch of a new co-operation accord between banks and the taxman last week, Banking Association MD Cas Coovadia described SA Revenue Service (Sars) commissioner Pravin Gordhan as a hard taskmaster. Gordhan smiled and nodded, no doubt pleased at his perceived muscle.
But at first glance you'd wonder why there was any need for a new deal. After all, the figures (see table, right) show that the big four banks Absa, Standard Bank, Nedbank and FirstRand paid R15,5bn in direct taxes last year, more than 25% of their profits. And if you add indirect taxes, these banks paid nearly R18,8bn to Gordhan.
The problem relates to the start of the decade, when the effective rate the banks were paying was …