Finance Minister Tito Mboweni on Wednesday referenced the private sector as the key engine for job creation in his national Budget speech. Fin24 spoke to the experts, who highlighted several key positives and negatives for small and medium enterprises from this year’s Budget.
Tax News
SA Budget 2019/20 – Nowhere to hide for tax dodgers stashing assets offshore
Putting money into offshore structures, thinking that you are safe from the tax man, is no longer the case, warns Jonty Leon, financial emigration legal manager at Tax Consulting SA. In terms of tax disclosure, it’s crucial to note that Finance Minister Tito Mboweni mentioned the globally agreed Common Reporting Standard in his Budget Speech on Wednesday showing a “clear nod” towards cracking down on tax dodgers, Leon says.
SA Budget 2019/20 – A Budget designed to steady the ship
South Africa is supposed to be a secular state, but one can perhaps forgive Tito Mboweni, the Minister of Finance, for quoting numerous biblical verses in his 2019 Budget Speech. After all, South Africas fiscal situation is enough to make many people hope for divine intervention. The 2019 budget numbers show that the past year has been no exception to some new normals that have been established in South Africa. These include slow economic growth, state-owned enterprises requiring unplanned financial support, failing plans aimed at stabilising national debt levels, and tax revenues significantly lower than forecast.
No increases in income tax rates or VAT; sin taxes and fuel levies to rise
There will be no increases in income tax rates and the VAT rate will remain unchanged, as government seeks to limit the negative effect of tax hikes on SA’s already struggling economic growth. In total, the Finance Minister Tito Mboweni’s maiden Budget includes proposals to raise R15bn in additional tax revenue for the 2019/2020 financial year. This will boost total estimated tax revenues to R1.4trn in 2019/2020. Tax revenue estimates for the 2018/19 year, however, have again been revised downwards. Treasury is now expecting a revenue shortfall of R42.8bn, an increase of R15.4bn over the R27.4bn estimated in the mini Budget in October. The shortfall was mainly due to a combination of economic weakness, problems of poor tax administration by the SA Revenue Service, and higher-than-expected VAT refunds, said Treasury in its Budget review. R15bn in additional revenue Not raising personal income tax brackets means more individuals may fall into Read More …
From Eskom to tax, this is Mboweni’s budget in a nutshell
Finance minister Tito Mboweni’s first National Budget came with no real surprises or shocks. Given the pressure-cooker that is state finances, especially those of struggling power utility Eskom, it appears to be a well-balanced act. Government’s central economic policy goal remains to accelerate inclusive growth and create jobs, said the minister, while ensuring sustainable finances by containing the Budget deficit and stabilising public debt.
South African Budget Speech Summary -Budget 2019/20
A very conservative budget was read by the South African Minister of Finance today, 20 February 2019. There are no notable increases in any of the direct or indirect taxes. The major increase in revenue is to be achieved by allowing bracket creep ie, to allow inflation to naturally increase the tax take. The Commission of Inquiry into Tax Administration and Governance by the South African Revenue Service(“SARS”) has recommended steps to improve governance at the agency. SARS is strengthening its operations by re-establishing the LBC and setting up a dedicated unit to tackle syndicated tax evasion. Revenue collections have been negatively impacted by paying out the backlog of VAT refund claims, which has substantially reduced the backlog of such claims. Click Here: 2019SouthAfricanbudgetspeechsummary
Finality to Debt Benefit Rules
Author: Siyanda Gaetsew. The Taxation Laws Amendment Act, 2018 (TLAA), which was promulgated on 17 January 2018, amended South African tax legislation by overhauling two provisions relating to the reduction of debt, (the Debt Benefit Rules), namely section 19 of the Income Tax Act, 1962 (the ITA) and paragraph 12A of the Eighth Schedule to the ITA (the Eighth Schedule). This article will examine the notable areas where the legislation per the TLAA differs and the importance of the timing of the application of such amendments.
A special dispensation: SARS ruling about special trusts
In recent times, the issue of mental health and the importance of caring for vulnerable persons with mental illnesses has become more prominent. Of course, the effect of mental illness on persons may differ depending on the nature of the illness. In the case of very serious forms of mental illness, a person may not be able to look after their own affairs any longer. From a tax perspective, the Income Tax Act, No 58 of 1962 (Act), makes provision for the creation of so-called special trusts, where the trust is created for the benefit of a person who cannot take care of his own affairs due to a disability (Beneficiary), including as a result of a serious mental illness. Share page The trustees of such a trust would then have to administer the assets of the trust in favour of the Beneficiary. In order for a trust to become Read More …
One less issue when issuing tax invoices
A tax invoice plays a pivotal role in the VAT system for suppliers and recipients alike. In terms of the Value-Added Tax Act, No 89 of 1991 (VAT Act), a supplying vendor is obliged to issue a tax invoice that complies with the requirements of the VAT Act within 21 days of making a taxable supply to a recipient. Similarly, a recipient vendor will only be entitled to claim an input tax deduction in respect of a VAT cost incurred for the purpose of making taxable supplies, to the extent that he or she is in possession of a valid tax invoice at the time of claiming the deduction. Share page A tax invoice is therefore an essential part of the audit trail of a vendor and its enterprise activities, and the failure to issue a tax invoice is a contravention of the VAT Act and an offence in terms Read More …
When must a reportable arrangement be disclosed to SARS?
Under the Tax Administration Act, No 28 of 2011 (TAA) persons who enter into certain types of transactions must report the details of those transactions to SARS. These types of transactions are called “reportable arrangements”. Share page The list of transactions that must be reported are set out in s35(1) of the TAA, and in s35(2) of the TAA as read with a SARS notice issued pursuant to that provision. The term “reportable arrangement” is defined in s34 of the TAA as “an ‘arrangement’ referred to in section 35(1) or 35(2) that is not an excluded ‘arrangement’ referred to in section 36”. The term “arrangement” is defined in s34 of the TAA as “any transaction, operation, scheme, agreement or understanding (whether enforceable or not)”. The term “participant” is defined in s34 of the TAA, simply put, as a person who promotes the arrangement, a person who may obtain a tax Read More …