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Cape Town - The SA Institute of Chartered Accountants (Saica) has called on Finance Minister Pravin Gordhan to introduce a more equitable and smoother regime for provisional taxpayers in his budget to be unveiled this week.
A number of changes to the tax laws are expected.
These changes are contained in annexure C of his speech, which relate directly to what the minister proposes to change in the tax amendment bill.
As part of the National Treasury's process of identifying changes, it approaches a number of finance professional bodies, including Saica.
"We believe that provisional taxpayers should have their assessments linked to inflation and raised logically from zero to 8% to 16% to 32% from the base year," said Muneer Hassan, Saica's project director for tax.
A provisional taxpayer's base year is the year of his or her last assessment by the SA Revenue Service (Sars). Currently, the base year's tax is 16% of income and Saica's view is that this is too much.
"Eight percent would be logically correct, but if a provisional taxpayer is earning income from rentals and other inflation-linked investments, then they are only receiving an increase in income of between 5% to 6%, while Sars hits them for 8% to 16%," Hassan said.
He also said a 16% increment was unaffordable, way above inflation and puts pressure on the livelihoods of people in this category.
Saica has also called for other changes in tax legislation, including to the learnership allowances, relief for small businesses, the raising of the R14m threshold of small business corporations at a more favourable rate, and simplification of VAT registrations.
The SA Chamber of Commerce and Industry (Sacci) also said on Monday that it hoped for "greater clarity" on a few policy issues in Gordhan's speech.
Sacci said it expected announcements of clear measures to reduce regulatory bottlenecks and red tape for business, allocations for small business support finance, further funding for job creation initiatives and further details on exchange control reforms.
Sacci president Chose Choeu said business also expected Gordhan to commit to a clear shift away from what he referred to as poverty alleviation measures that might foster dependency.
"Sacci expects enterprise support and support for the business environment to be a key theme of the national budget," Choeu said.
A number of changes to the tax laws are expected.
These changes are contained in annexure C of his speech, which relate directly to what the minister proposes to change in the tax amendment bill.
As part of the National Treasury's process of identifying changes, it approaches a number of finance professional bodies, including Saica.
"We believe that provisional taxpayers should have their assessments linked to inflation and raised logically from zero to 8% to 16% to 32% from the base year," said Muneer Hassan, Saica's project director for tax.
A provisional taxpayer's base year is the year of his or her last assessment by the SA Revenue Service (Sars). Currently, the base year's tax is 16% of income and Saica's view is that this is too much.
"Eight percent would be logically correct, but if a provisional taxpayer is earning income from rentals and other inflation-linked investments, then they are only receiving an increase in income of between 5% to 6%, while Sars hits them for 8% to 16%," Hassan said.
He also said a 16% increment was unaffordable, way above inflation and puts pressure on the livelihoods of people in this category.
Saica has also called for other changes in tax legislation, including to the learnership allowances, relief for small businesses, the raising of the R14m threshold of small business corporations at a more favourable rate, and simplification of VAT registrations.
The SA Chamber of Commerce and Industry (Sacci) also said on Monday that it hoped for "greater clarity" on a few policy issues in Gordhan's speech.
Sacci said it expected announcements of clear measures to reduce regulatory bottlenecks and red tape for business, allocations for small business support finance, further funding for job creation initiatives and further details on exchange control reforms.
Sacci president Chose Choeu said business also expected Gordhan to commit to a clear shift away from what he referred to as poverty alleviation measures that might foster dependency.
"Sacci expects enterprise support and support for the business environment to be a key theme of the national budget," Choeu said.
