The South African Revenue Service (SARS) launches the 2014 Tax Season. This annual campaign has evolved into an important partnership between government and taxpayers who make a vital contribution to our country’s tax system.
Author: Nyasha Musviba
VAT Treatment of loyalty programmes
By Carin Grobbelaar and Janine Swanepoel, Grant Thornton Cape Loyalty programmes are gaining more popularity as companies aim to make their products and services more attractive than their competitors’ offers. These programmes are widely used as incentive schemes to encourage spending and build loyalty by rewarding customers with discounts, vouchers and other benefits.
Will SARS’ Interpretation Note No. 77 reduce the compliance burden for employer-provided telecommunication equipment and services?
By Bruce Russell, Tax Consultant, Grant Thornton Cape Employers provide their employees with telecommunication devices and services to enable them to work more efficiently. While the intention may be that these will be used solely for business purposes, there is often an element of private use of the devices, airtime and data.
Understatement Penalties in hindsight
Some 20 months after the introduction of Understatement Penalties, it is worth taking stock of where taxpayers find themselves following their introduction, and highlighting some of the challenges they are experiencing. Many taxpayers have become all too familiar with this Understatement Penalty Percentage Table (fig. 1 below) contained in section 223 of the Tax Administration Act No 28 of 2011 (“the TAA”), which was mercifully amended earlier this year by the reduction of some of the penalty percentages:
The golden goose’s burden
Over the past few years, we have regularly raised concerns about the future of South Africa’s golden goose, the taxpayer. However, as this year’s tax season kicks off, our fears remain unabated, especially when we consider facts such as these recently highlighted by Economist Mike Schüssler: • According to the World Bank, South Africa has the seventh highest tax revenue to GDP ratio when social security taxes such as unemployment insurance and compulsory pensions are left out.
SARS targets R1 trillion in tax collections
The SA Revenue Service intends collecting nearly R1 trillion during the 2014/15 tax season, which began on Tuesday. Tax revenue was expected to grow by 10.4% to R993.6 billion, with R899.8 billion collected last year, after refunds, Finance Minister Nhlanhla Nene told reporters in Pretoria. Nene said Sars’s ability to collect revenue had been one of the cornerstones of South Africa’s 20-year-old democracy as it affected government’s ability to deliver public services.
SARS filing season tips
Tax Season starts 1 July and for eFilers the process is even easier this year. Here are a few tips that will help you complete and submit your return easily, honestly and on time:
Tax break offers opportunity to reduce under-insurance
Author: Kristy Jooste (Cape Business News) From March 2015, an amendment to the Income Tax Act will standardise the tax treatment of insurance policies that offer protection against death and disability. Currently, premiums on policies that pay out a lump sum on disability are not tax-deductible, but lump sums paid are tax-free. However, premiums on income-protection policies are tax-deductible, but monthly income on payout is taxed.
Deductibility of audit fees
Author: Beric Croome (Tax ENSight) On 7th March 2014 the Supreme Court of Appeal delivered judgment in the as yet unreported case of Commissioner for the South African Revenue Service v Mobile Telephone Networks Holdings (Pty) Ltd, (966/2012) [2014] ZASCA 4 (7 March 2014) which dealt with the deductibility of audit fees incurred for a dual or mixed purpose and the apportionment thereof for tax purposes in the light of section 11(a) of the Income Tax Act 58 of 1962, as amended (‘the Act’) read with sections 23(f) and 23(g) of the Act.
Interpretation of the Tax Administration Act in the context of SARS' powers to recover tax
Author: Caroline Rogers (Tax ENSight) The Tax Administration Act 28 of 2011 (“Tax Administration Act”) came into effect on 1 October 2012 (save for certain provisions that are still to come into force). This important piece of legislation seeks to incorporate into one Act all those administrative provisions (except for customs and excise) that are generic to all tax Acts and that were previously duplicated across all the different tax Acts.