By Professor Matthew Lester To see the full income tax tables from Budget 2015, click here. In these tough times it is difficult to take a long-term view on sustainability. So when it comes to the National Budget speech the media concentrates on the immediate implications such as tax increases and regurgitating seemingly meaningless numbers. The 2015 State of the Nation Address ‘SONA’ degenerated into a slanging match, precipitated by the very important governance issue of Nkandla. Perhaps the biggest disgrace in the Nkandla debacle is that it has turned our political leaders attention away from a country in crisis.
Tax News
Fuel levy likely to more than cover RAF claim costs
Author: Donwald Pressly – Fin24 Cape Town – The government expects last week’s hike in the fuel levy to cover the monthly claim settlement costs of the embattled Road Accident Fund (RAF) with a little bit to spare, according to an answer provided to MPs by Transport Minister Dipuo Peters.
Is the budget really pro-poor?
Author: Dewald van Rensburg, City Press Grants The centrepiece of the fiscal policy’s progressiveness is the massive social-grant system, which provides income of R120bn to millions of poor South Africans. This year’s increases to the grants are, however, almost guaranteed to decrease their beneficiaries’ spending power. The grants are going up by 4.4%. Treasury says this is in line with its projections for inflation for the first half of this year.
Nene is running out of options – expert
Author: Carin Smith Cape Town – South Africans should remember that Finance Minister Nhlanhla Nene can only do so much in his budget 2015 as he is not the president, said deputy CEO of the SA Institute of Tax Practitioners (Sait) Keith Engel. READ: Nene’s budget stymied by political realities “The question is whether Nene has the backing,” he said at a post budget event hosted by Deloitte in Cape Town.
Two key encouraging messages in budget 2015
Author: Carin Smith – Fin24 Cape Town – There are two key encouraging messages from Finance Minister Nhlanhla Nene‘s budget for Anthea Scholtz, tax director at Deloitte. The first is that government is not going to be “irrational” by implementing major tax increases, lots of new legislation or many new taxes as was anticipated beforehand. “The minister calmed the nerves with his budget 2015. The question is, however, will the SA Revenue Service be as rational when it enforces the legislation?” asked Scholtz at a post budget event hosted by Deloitte on Friday.
2015 Budget offers glimmer of hope for SMEs
Cape Town – This year’s budget from Finance Minister Nhlanhla Nene showed some support for the country’s small and medium enterprises (SMEs) by giving further tax relief to the smallest enterprises, yet it could have done more to help local businesses prosper. That’s according to Daryl Blundell, GM of Sage Pastel Accounting, who says that the government has yet to translate its talk about the importance of small business into bold actions and strategies that give a serious boost to the SME sector.
REIT legislation extended to unlisted property-owning companies
Section 25BB of the Income Tax Act was adopted in South Africa with effect from 1 April 2013 to govern the taxation of real estate investment trusts (REITs). A REIT is a company that owns and operates income-producing immovable property. The definition of a REIT in the Income Tax Act refers to a company that is a South African tax resident whose shares are listed on the JSE as shares in a REIT, as defined in the JSE Limited Listing Requirements.
CFC rules to be amended in the battle against BEPS
A controlled foreign company (CFC) is any foreign company of which more than 50% of the total participation rights are directly or indirectly held, or of which more than 50% of the voting rights are directly or indirectly exercisable, by one or more South African residents.
Cross-issue of shares
Generally, the issue of a share by a company does not constitute a disposal for purposes of capital gains tax. However, in 2013, paragraph 11(2)(b) of the Eighth Schedule to the Income Tax Act was amended to the effect that the issue of shares by a resident company for the exchange, whether directly or indirectly, of shares in a foreign company would constitute a disposal.
Securities lending arrangements
A securities lending arrangement entails a lender advancing shares to a borrower to enable such borrower to on-deliver the marketable security in terms of a sale or on-lending transaction. The borrower is obliged to deliver the equivalent marketable security (in kind, quality and quantity) to the lender within a specified period of the original advance and to compensate the lender for any distributions to which he would have been entitled to during such period.