The South African Revenue Service (SARS) today releases trade statistics for February 2013 that record a trade deficit of R9.52 billion. Summary The R9.52 billion deficit for February 2013 can be attributed to exports of R62.32 billion and imports of R71.84 billion. Exports increased from January to February by R9.04 billion (17.0%) and imports decreased from January to February by R5.97 billion (-7.7%). The reduction in the trade deficit from R24.5 billion in January 2013 was due to an increase in exports of mineral products, chemical products, precious metals and machinery and electrical appliances. Imports decreased in the following sections: prepared foodstuffs, chemical products, plastics and rubber, machinery and electronics and vehicles, aircraft and vessels. The cumulative deficit for 2013 is R34.11 billion compared to R23.71 billion in 2012.
Tax News
The Trustees of the Insolvent Estate of Grahame Whitehead v Dumas (323/12) [2013] ZASCA 19
The Supreme Court of Appeal (SCA) heard the matter between The Trustees of the Insolvent Estate of Grahame Whitehead and Dr Leon Dumas on 1 March 2013. The judgment was delivered on 20 March 2013 by Cachalia JA (with Lewis, Ponnan, Theron and Petse JJA concurring).
Caught on tape: Tax boss and drug dealer
Cosy liaison with head of Sars revealed in jobs-for-pals scandal SA Revenue Service (Sars) boss Oupa Magashula is at the centre of a jobs-for-pals scandal involving a convicted drug dealer who is allegedly a police informant. In a clandestine recording laced with sexual innuendo, a copy of which City Press has in its possession, Magashula and Panganathan “Timmy’’ Marimuthu offer a 28-year-old woman from Marimuthu’s charismatic church a R700 000-a-year Sars post. Sars officials this week confirmed the authenticity of the recording, but claim their boss’ hands are clean and Marimuthu set him up.
Retirement reform: how you’ll score
By Laura du Preez Making trustees of retirement funds responsible for choosing a default annuity for you on retirement could result in you getting a better pension, delegates to the Pension Lawyers Association conference heard this week. Kobus Hanekom, head of strategy, governance and compliance at Simeka Consultants & Actuaries, an affiliate of Sanlam Employee Benefits, says there is a huge shift in responsibility to trustees in National Treasury’s latest retirement reform proposals, which were released with the Budget late last month.
Pravin’s big retirement changes on track
You need to gear up your retirement planning to meet T-Day and P-Day, when government will implement major changes to the R3-trillion retirement savings industry. T-Day and P-Day are days when retirement fund reforms are scheduled to be implemented in or after 2015, with legislation based on government’s latest proposals for retirement reform being put before Parliament this year. The proposals are outlined in a discussion paper titled “2013 Retirement reform proposals for further consultations”.
Recent case on judicial review of SARS’ actions in terms of PAJA
By Hanneke Farrand and Esther Geldenhuys, ENS – Edward Nathan Sonnenbergs The South African Revenue Service (“SARS”) increased their audit activity and focus on the collection of tax. Taxpayers often rely on protection in terms of administrative law and in particular, the Promotion of Administrative Justice Act, No. 3 of 2000 (“PAJA”). An important rule under PAJA is that judicial review can only be used as a last resort after all other internal remedies have been exhausted and taxpayers therefore first have to make use of the objection and appeal procedures provided for in the Tax Administration Act, No. 28 of 2011. The case outlined below highlights the nature of some of SARS’ actions that may be brought under judicial review in terms of section 6 of PAJA and the circumstances under which such a review application might be dismissed.
Rooibos
Rooibos certainly does make the headlines. That soothing cup of tea that so many of us enjoy was big news a few years back when an American company announced that it had a US trade mark registration for the name Rooibos, and that it would be able to block South African exporters of rooibos tea from using the name in the USA – it subsequently transpired that a South African entrepreneur who had been at the forefront of rooibos exports to the USA had in fact obtained the US registration way back in 1994 (at a time when the name was practically unknown outside of South Africa),
When can SARS re-characterise contractual arrangements for taxation purposes?
Tax planning structures normally involve multiple parties. Sometimes the individuals and/or legal entities involved are inter-connected. The tax benefits generated through such structures, almost without exception, annoy revenue authorities.
Dividends withholding tax implications where a resident company is a beneficiary of a share scheme trust
Dividends withholding tax (“DWT”) was introduced into the Income Tax Act 58 of 1962 (“the Act”) with effect from 1 April 2012. Section 64F of the Act exempts the withholding of DWT in respect of the receipt of dividends, to the extent that it does not consist of dividends in specie by “beneficial owners” which are listed in the section. A resident company is included in the exemption in terms of the list in section 64F(a) .
Changes to the taxation of dividend cessions and manufactured dividends
In the 2013 Budget Review, which was released on 27 February 2013, specific mention was made that a research project is underway in which consideration is being given to a unified treatment of dividend cessions and manufactured dividends. As part of this project it noted that consideration will be given to anti-avoidance rules to eliminate the shift in the income from taxable parties to exempt parties. The Budget Review states that the tax impact of a dividend transfer depends on wh