Special voluntary disclosure programme: is the carrot big enough or will taxpayers risk facing the stick?

A special voluntary disclosure programme (Special VDP) was announced on 24 February 2016 by the Minister of Finance in the 2016 Budget Speech, which is intended to provide further relief to qualifying persons in addition to the relief provided by the standard voluntary disclosure programme under the Tax Administration Act, No 28 of 2011 (TAA). On 12 April 2016, National Treasury (Treasury) released a media statement in which the public is requested to make formal submissions on draft legislation that sets out the legal framework of the Special VDP.

Carbon Tax Draft Bill published for comment

On Monday, 2 November 2015, the South African National Treasury published a Draft Carbon Tax Bill (the “Bill”) for public comment by 15 December 2015. At first glance, the Bill does not stray too far from the carbon tax design that Treasury has been proposing since 2010 in various discussion papers, national budget speeches and their associated explanatory memoranda and responses to stakeholder commentary on the design. Whilst the Bill does not change the essentials, it does progress certain of the detail while providing only a tantalising glimpse of some of the more interesting aspects of the design. While the proposed tax is vaunted as thecarbon tax, this is not the only or the first carbon tax imposed in South Africa. Emissions on new vehicles are subject to emissions taxation and approximately five years ago, the fossil fuel electricity levy was introduced. These are both taxes on greenhouse gas emissions, … Continue reading

SARS MEDIA STATEMENT – Special Voluntary Disclosure Programme in respect of offshore assets and income

In the 2016 Budget Speech, the Minister of Finance announced a Special Voluntary Disclosure Programme to give opportunity for non-compliant taxpayers to voluntarily disclose offshore assets and income. With a new global standard for the automatic exchange of information between tax authorities providing SARS with additional information from 2017, time is now running out for taxpayers who still have undisclosed assets abroad. To encourage compliance, Government proposes a Special Voluntary Disclosure Programme for individuals and companies to regularise both their tax and exchange control affairs for a limited window period described below. The South African Revenue Service (SARS) and the South African Reserve Bank (SARB) are working jointly to ensure that applications for the Special Voluntary Disclosure Programme are assessed through one joint process for both tax non-compliance and exchange control contraventions.

South African budget takes aim at hybrid debt instruments, share buybacks

Author: Peter Dachs (MNE Tax). South Africa’s Minister of Finance has announced tax changes affecting business in the 2016 budget, including a measure to curb perceived abuses associated with hybrid debt instruments and a warning about future action on share buybacks Under South African domestic law, hybrid debt instruments, i.e. debt instruments with certain equity features, result in the return thereon being treated as a tax-exempt dividend. The budget, issued February 24, states that with immediate effect in circumstances where a nonresident issuer obtains a tax deduction for a payment on a hybrid debt instrument, the South African taxpayer receiving the return will be taxable thereon.

Budget 2016 South African budget speech summary | tax proposals

Overview The Honourable Minister of Finance read the 2016 South African budget speech on 24 February 2016. In this summary, we address only the revenue (i.e. tax) side of the budget proposals. As this budget speech has received an unusual amount of interest, we have set out the tax proposals in more detail than usual, although this summary is not intended to be comprehensive. The economic growth outlook for 2016 has been revised down to 0.9%. Tax revenues are projected to be R11.6-billion down; corporate tax is estimated to be R13-billion down; value added tax (“VAT”) is to be R5.7-billion down and personal income tax R1.9-billion down. On the other hand, customs duties should increase by R4.3-billion.

Experts hail withdrawal of ‘unworkable’ withholding tax

Author: Amanda Visser (BDlive). The withdrawal of a withholding tax on service payments to foreigners, decried by many as unworkable, has been widely welcomed. The Treasury acknowledged that the tax had introduced “unforeseen issues, uncertainty on the application of domestic law and taxing rights under tax treaties”. The withholding tax was introduced into legislation in 2013 but its operation was postponed on several occasions. It was due to come into effect in January next year but will now be withdrawn from legislation.

Budget 2016 – Bid to end abuse of trusts

Author: Amanda Visser (IOL). Proposed changes to the tax treatment of trusts could bring an end to a common abuse of trusts as a way of reducing estate duty. National Treasury and the South African Revenue Service (SARS) have increasingly attacked the use of trusts to limit the tax liability of especially the very wealthy through estate planning.

Budget 2016 – Budget in a nutshell

Author: Jaco Leuvennink (Fin24). Finance Minister Pravin Gordhan’s first comeback National Budget tabled on Wednesday afternoon in Parliament was relatively calm and workmanlike one after all the expectations of tax hikes and spending cuts amid tough economic times. He stressed the need to reaffirm government’s commitment to close the gap between spending and revenue, implementing a plan for stronger economic growth and cooperation between government and the business sector. That should keep the rating agencies that want to downgrade SA’s debt position to junk status temporarily at bay.

Budget 2016 wrap: Gordhan dishes out tough love for everyone

Author: Thalia Holmes (Mail & Guardian). Finance Minister Pravin Gordhan’s budget focused on reining in government expenditure, raising tax revenues and preventing a ratings downgrade. This February, Finance Minister Pravin Gordhan is everyone’s Valentine. But civil servants may feel he’s handing out empty boxes of chocolate and wilted roses. On Wednesday, Gordhan faced the unenviable task of presenting a budget speech that straddled almost impossible territory. He did it with an almost abrasive optimism – one that, at times, seemed disingenuous with the economic and social desperation that has gripped many South Africans. He had a melody in his heart, repeated as a refrain throughout his speech: “We are resilient. We are committed. We are resourceful.” 

Budget 2016 – Gordhan announces sugar tax

Author: Lynley Donnelly (Mail & Guardian). Finance Minister Pravin Gordhan has revealed plans to introduce a tax on sugar-sweetened beverages, similar to the sin taxes on alcohol and tobacco. Among the sins that the government taxes, you can now include sugar along with the likes of alcohol and tobacco. In his 2016 budget speech released on Wednesday Finance Minister Pravin Gordhan announced plans to introduce a tax on sugar-sweetened beverages.