By Daniel Schutte, Waldo Krugell, Pieter Van der Zwan, & Marianne Matthee
We propose to analyse the permanent and temporary differences of South African firms according to size, industry as well as for the period covered in the data panel. Our analysis will provide valuable information about the differences between accounting profits and the taxable income of South African firms. Our study will also provide evidence of the specific types of tax deductions and incentives for different categories of South African firms and could provide a basis for the evaluation of tax incentives by the South African Revenue Service. In addition our study may provide evidence of the creation or reversal of temporary differences over a period of time.
Previous studies concerning book-tax differences focused on listed companies only. In our opinion, this would be the first study that will include, in addition to listed companies, SME data as well as other companies’ data that are not publicly available.