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.
Authors: Robert Gad, Anneke Meiring and Jadyne Devnarain The purpose of the Tax Administration Act No. 28 of 2011 (“the TAA”), is to ensure the effective and efficient collection of tax, by aligning the administration of the tax Acts to the extent practically possible, prescribing the rights and obligations of taxpayers and other persons to whom the TAA applies, prescribing the powers and duties of persons engaged in the administration of a tax Act, and generally giving effect to the objects and purposes of tax administration.
Authors: Lavina Daya and Yani van der Merwe and Liesl Visser This article sets out a brief summary of some of the proposed amendments introduced by recent South African draft Tax Bills. The article focuses on amendments in the context of international taxation. The draft Taxation Laws Amendment Bill, 2015 (“draft TLAB”) and the draft Tax Administration Laws Amendment Bill, 2015 (“draft TALAB”) were released by National Treasury on July 22, 2015. These draft Bills aim to provide the necessary legislative amendments required to implement most of the tax proposals outlined in the 2015 Budget Review. Specifically, the draft TLAB deals with more substantive changes to tax legislation and the draft TALAB deals with administrative provisions of tax legislation currently administered by the South African Revenue Service (“SARS”). We consider proposed amendments in an international tax context below.
Consumers and businesses by now have had a few months to assess the impact of tax changes indicated by the Finance Minister in his most recent Budget Speech. “Be wary though that with these changes also come charlatans who pounce on uninformed business owners and individuals with offers ranging from sophisticated tax avoidance schemes to offers of products or services to ensure compliance,” warns BDO Pretoria Consultant and ex-Managing Partner, Roy Edge. “This is nothing new, we see it all the time where individuals or groups lure unsuspecting people into parting with hard-earned money by investing in new and creative tax schemes.”
The major talking point within the South African Customs environment was the recent promulgation of the Customs Control Act, 2014 and Customs Duty Act, 2014 (“the Acts”) by parliament. There remains a lot of work outstanding before the Acts can be fully implemented and SARS are currently conducting extensive work surrounding the drafting of the Rules to the Acts and have published several batches for comment. The first phase of implementation is expected to “go live” in 2016 and will deal with Registration and Licensing. In terms of Section 931 and 933 of the Customs Control Act, an existing customs license and registration lapses 30 days after the “effective date”, unless the holder of that registration before the expiry thereof has submitted an application to the customs authority for a new registration. If the holder of the customs registration or license applies for a new license before the expiry, then the existing registration and license will continue until dispensed with. The “effective Read More …
The Davis Tax Committee (DTC) consideration that a wealth tax for South Africans is not the universal solution to South Africa’s revenue needs. This is the view of Rhodes Business School Professor and DTC member Matthew Lester who was speaking at a BDO South Africa event last week. Professor Lester dissected the current taxation system within the country commenting on what is working, what isn’t and what changes need to be implemented for the future economic growth of the country.
Author: Pieter van der Zwan (NWU) Pieter van der Zwan revisits the economic reasons for the introduction of section 6quin. Section 6quin was introduced into the Income Tax Act by the 2011 Taxation Laws Amendment Act as a measure to enable entities to provide services into Africa in a manner that such services were commercially viable. With the section having been in effect for more than 3 years now, it was indicated in the 2015 Budget Review that the concession contained in section 6quin would be withdrawn due to the significant compliance burden that it places on SARS and taxpayers as well as the fact that it is being exploited by some taxpayers.
Johannesburg, 23 July 2015 – The 2015 Budget announced by Finance Minister Nene included a number of measures to bolster tax revenues from an international perspective. According to David Warneke, a Director and Head of Tax Technical with BDO South Africa, these measures include potentially removing tax relief currently afforded to South African companies on service income received from outside South Africa. This could negatively impact foreign direct investment into South Africa. “This was originally introduced to relief South African companies of withholding taxes (sometimes in contravention of the Double Taxation Treaties) imposed by foreign entities that became unrecoverable,” says Warneke.
Author: Leonard Willemse (Mazars) The Minister of Finance, as an incentive to encourage household savings, introduced the concept of a ‘tax free investment’ with effect from 1 March 2015. A tax free investment is any financial instrument or policy administered by regulated institutions (such as banks) owned by a natural person and authorised as such by the Minister of Finance. In terms of section 12T of the Income Tax Act No. 58 of 1962 (‘the Act’) any amount received by or accrued to a natural person in respect of a tax free investment shall be exempt from normal tax. Furthermore, where any capital gains or losses are realised in respect of the disposal of a tax free investment, it should be disregarded in determining the aggregate capital gain or loss of a person.
Author: Linda Ensor (BDlive) The Treasury is sticking to its guns about implementing the carbon tax from next year, dashing the hopes of business that there might be further delays to the unpopular measure it believes will add another burden to an economy already reeling from load shedding and low growth. Treasury deputy director-general Ismail Momoniat confirmed on Tuesday that the 2016 implementation date was still on track and that it would “hopefully” be releasing a draft bill within the next two months for public comment. This would allow enough time to get the bill promulgated by next year.