Cape Town – The rand plummeted against major international currencies on Wednesday evening shortly after President Jacob Zuma removed Nhlanhla Nene as finance minister. By 21:20 the rand was trading at R16.34 to the euro, down 2.74%, and R22.5 against the pound, down 2.5%. The rand was down 1.39% against the greenback at R14.83/$. Zuma announced late on Wednesday the removal of Nene from the Finance Portfolio in Cabinet, saying Nene had been removed ahead of his “deployment to another strategic position”. Zuma has appointed ANC member of parliament, David van Rooyen, as the new Minister of Finance.
Tax News
Zuma removes Nene as finance minister
Cape Town – President Jacob Zuma on Wednesday announced the removal of Finance Minister Nhlanhla Nene from the Finance portfolio in Cabinet. “I have decided to remove Mr Nhlanhla Nene as Minister of Finance, ahead of his deployment to another strategic position,” Zuma said in a statement. Zuma said that Nene had done well since his appointment as Minister of Finance during a difficult economic climate. Zuma has appointed ANC member of parliament, David Van Rooyen, as the new Minister of Finance. Van Rooyen served as the Whip of the Standing Committee on Finance and as Whip of the Economic Transformation Cluster. He was also a former executive mayor of Merafong Municipality and a former North West provincial chairperson of the South African Local Government Association. “The new deployment of Mr Nene will be announced in due course,” Zuma said.
Victory for taxpayer in motor vehicle salary sacrifice scheme
Author: Ruaan van Eeden (Cliffe Dekker Hofmeyr). In the recently reported case of Anglo Platinum Management Services v SARS [2015] ZASCA 180 (Anglo), the judgment of which was delivered on 30 November 2015, the Supreme Court of Appeal (SCA) ruled in favour of the taxpayer in respect of a motor vehicle salary sacrifice scheme. The judgment stresses the importance of employers and employees properly agreeing to, understanding and correctly implementing remuneration structures that contain a salary sacrifice component.
Proposed extension of existing prescription periods (section 99 of the Tax Administration Act)
Author: Mareli Treurnicht. Section 99 of the Tax Administration Act, No 28 of 2011 (TAA) prescribes the period of limitations (ie prescription) for the issuance of assessments. Section 99 currently states that the South African Revenue Service (SARS) may not make an assessment in terms of Chapter 8 of the TAA, inter alia: three years after the date of assessment of an original assessment by SARS; (in the case of self-assessment for which a return is required) five years after the date of assessment of an original assessment by way of self-assessment by the taxpayer or, if no return is received, by SARS; or (in the case of a self-assessment for which no return is required) after the expiration of five years from either the date of the last payment of the tax for the tax period or the effective date, if no payment was made in respect of the Read More …
OVER 5.94 MILLION MEET TAX DEADLINE
Pretoria, 29 November 2015 – The South African Revenue Service (SARS) Acting Commissioner, Jonas Makwakwa announced that SARS received 5.94 million tax returns at the end of the Tax Season for non-provisional taxpayers which ended on Friday, 27 November. Announcing the preliminary results Makwakwa paid tribute to taxpayers that met their responsibility. “No doubt this is a significant achievement. We are proud of the high level of fiscal citizenship demonstrated by taxpayers. Thank you South Africa, this Tax Season belongs to the millions of taxpayers that submitted their tax returns on time”. The 5.94 million submissions received were 11,52% higher than in 2014. This number includes individuals, trusts and prior year submissions. Compliance for taxpayers filing on time exceeded 90% for the third consecutive year.
Carbon Tax – Liable Entities
Author: Mansoor Parker and Andrew Gilder (ENSafrica) On Monday 2 November 2015, the South African National Treasury published a Draft Carbon Tax Bill (the “Bill”) for public comment, with the comment period commencing immediately and continuing until 15 December 2015. Among the themes that we will be exploring in this series of articles on the Bill are the aspects of the carbon tax regime that will feel out-of-the-ordinary for professional tax practitioners. Like the phenomenon to which it is intended to respond, namely climate change (as much an economic challenge as an environmental one), a comprehensive response to the carbon tax will require tax professionals to look beyond their usual sphere of operations and to cooperate with professionals from a range of other disciplines. This is also a function of the tax design which encompasses elements of tax law, carbon markets law, environmental law and financial and operational strategy. While Read More …
Proposed amendments to the rules of prescription – does this leave a taxpayer with any certainty?
Authors: Robert Gad and Taryn Solomon (ENSafrica). A fundamental reason for the existence of the rules of prescription in our tax law is to provide a taxpayer with certainty as regards its tax position. It is therefore important that such rules are clear and not subject to unfettered discretions. In disputes with the Commissioner for South African Revenue Service (“the Commissioner” or “SARS”), prescription is a powerful defence available to compliant taxpayers, allowing them to bring finality to their tax assessments.
FORMER SARS OFFICIAL ARRESTED FOR R5-MILLION VAT FRAUD
Pretoria, 27 November 2015 – A chartered accountant and former SARS employee was arrested for alleged VAT fraud of more than R5-million at her place of work in Centurion earlier today. The fraud happened over a nine year period. The female suspect is a director of a closed corporation (cc) that provides consultancy and bookkeeping services. She is alleged to have submitted false VAT invoices and bank statements to SARS between 2007 and 2015 to substantiate VAT refund claims amounting to R5, 1 million. The investigation commenced after SARS’ risk engines identified the taxpayer for an audit due to the unusual refund trend that emerged over the years. Upon requesting supporting documentation, SARS’s investigators established through third party verification that fictional invoices had been submitted to SARS. They also found that bank statements that were submitted to substantiate refund claims were not authentic.
Taxation of trusts in the future
Author: Heinrich Louw (Senior Associate at Cliffe Dekker Hofmeyr). Earlier this year the Davis Tax Committee (DTC) released its first report on estate duty for public comment. The report contained a number of disconcerting recommendations with regard to the taxation of trusts. The DTC was tasked with considering the use of trusts as vehicles employed by taxpayers to divest themselves of their assets during their lifetime, thereby saving estate duty upon their death. On the DTC’s analysis, there are two main problems with the current regime relating to the taxation of trusts.
Corrections of tax assessments – what is readily apparent to SARS?
Author: David Warneke Director and Head of Tax Technical at BDO South Africa. The latest version of the Tax Administration Laws Amendment Bill of 2015, which is likely to be promulgated in its current form, proposes that in future SARS will not be permitted to entertain so-called ‘requests for correction’ of tax assessments, except if SARS is satisfied that there is a (currently undefined) ‘readily apparent’ undisputed error in the assessment. In my view, it is likely that taxpayers will be severely prejudiced by this amendment. What is ‘readily apparent’ to one person may not be so to another. The number of cases in which SARS is likely to grant requests for corrections is likely to drop dramatically and a lack of consistency in interpretation between SARS’ assessors may be taken as a given.