Authors: Andisiwe Makinana, Setumo Stone and Hlengiwe Nhlabathi (News24). Government is set to take the drastic step of revising ousted finance minister Nhlanhla Nene’s medium-term expenditure plans, as the economic situation has become a lot more dire since he presented it in October. This unprecedented move was revealed by ministers after an extraordinary ministers’ meeting on the economy this week.
Author: Nyasha Musviba
GEPF not affected by new tax legislation
Author: BDlive. The Government Employees Pension Fund (GEPF) has assured its members and pensioners that the new Taxation Laws Amendment Act will not affect their pensions or benefits. The fund is SA’s largest pension fund and investor, with about 1.2-million members and more than R1-trillion in assets under management. It pointed out on Monday that as a defined benefit pension fund‚ the benefits of the fund were already taken as a one-third lump sum gratuity and the remaining two-thirds were taken as a pension.
The ins and outs of retirement reform
Author: Michelle Acton. A Q&A for provident fund and pension fund members As the reforms related to tax harmonisation of retirement funds is set to become a reality on1 March – or T-day, as it has become known – it is vital members are communicated with in order to avoid hasty, and potentially damaging actions. There has been much uncertainty from members as to how they will be impacted. The below Q&A aims to assist provident fund and pension fund members understand the latest amendments and to what extent they are impacted by the changes.
Victory for taxpayer in motor vehicle salary sacrifice scheme
In Anglo Platinum Management Services v SARS,(1) the Supreme Court of Appeal (SCA) recently ruled in favour of the taxpayer in respect of a motor vehicle salary sacrifice scheme. The judgment underlines the importance of employers and employees properly agreeing, understanding and implementing any remuneration structures that contain a salary sacrifice component. Background A ‘salary sacrifice’ or ‘salary substitution’ arrangement is essentially the substitution of a cash component of an employee’s overall cost-to-company remuneration package for a non-cash benefit, generally resulting in a lower amount subject to the deduction of employees’ tax.
Absolving of employer from an employees’ tax liability process to be formalised
The Taxation Laws Amendment Act, No 23 of 2015 (TLAA) contains an amendment to a somewhat odd provision, that has seemingly stood the test of time since the introduction of the Fourth Schedule into the Income Tax Act, No 58 of 1962. Paragraph 5(2) of the Fourth Schedule, dealing with absolving an employer from liability in respect of employees’ tax, has now been amended to provide a more formal approach, when compared to its previous version, which is still riddled with discretionary powers.
Converting loans into equity: another SARS ruling
Author: Ben Strauss. The issue of ‘converting’ loans into share capital remains a vexing one. The matter was again the subject in Binding Private Ruling 213 (Ruling) issued by the South African Revenue Service (SARS). The facts of the Ruling are common. To fund its operational expenditure, a company resident in South Africa borrowed money from its non-resident holding company and other non-resident companies related to the holding company. The holding company proposed to subscribe for further ordinary no par value shares in the local company. The subscription price would be equal to the total amount of the local company’s indebtedness to the holding company and the related companies. Notably, the subscription price would be paid in cash. The local company would then use the cash to settle the capital of, and the interest on, the loans. SARS ruled as follows in relation to the proposed transaction: The issue of Read More …
Draft bill on carbon tax released
Author: Heinrich Louw (International Law Office). Having been the subject of various discussion papers since 2011, the introduction of a carbon tax in South Africa is becoming a reality with the release of a draft carbon tax bill earlier this month. It has been clear since at least 2013 that South Africa would opt for a carbon tax in order to price carbon, as opposed to an emissions-trading scheme. The draft bill sets out the mechanics of the carbon tax. Greenhouse gas levy Essentially, the carbon tax will be levied in respect of the greenhouse gases that result from:
Zuma moves to calm waters over provident funds
Author: Ingé Lamprecht (Moneyweb). President Jacob Zuma has moved to calm the waters after the Congress of South African Trade Unions (Cosatu) demanded that the new regulations that will compel provident fund members to annuitise be scrapped. Zuma signed the Tax Administration Laws Amendment Act and the Taxation Laws Amendment Act into law earlier this month. The regulations, which will harmonise the taxation of contributions to pension funds, retirement annuities and provident funds, will take effect on March 1.
Gordhan moves to calm workers over new pension laws
Author: Jenni Evans (Fin24). Controversial new pension laws only apply to money saved from 1 April this year, Finance Minister Pravin Gordhan said on Thursday. “Anything you saved up to March this year is not touched. The old rules still apply,” Gordhan said at a post-Cabinet briefing broadcast from Pretoria. Panic and anger set in among workers when President Jacob Zuma signed the new tax laws such as the 2015 Tax Laws Amendment Act and the Tax Administration Laws Amendment Act into force.
Gordhan’s SARS move in the nick of time
Author: Financial Mail The reappointment of Pravin Gordhan as finance minister has been welcomed, going some way to ease market jitters caused by President Jacob Zuma’s axing of Nhlanhla Nene. Gordhan’s appointment was, however, less well received in the executive corridors of the SA Revenue Service (SARS). This is predictable, considering that commissioner Tom Moyane, appointed by Zuma at the end of 2014, quickly took it upon himself to systematically unravel the work done by Gordhan during his own tenure at SARS.