Treasury, SARS call for comment on tax law amendments | Fin24
 
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Treasury, SARS call for comment on tax law amendments

Jul 18 2018 15:58
Khulekani Magubane

National Treasury and the South African Revenue Service (SARS) are giving South Africans until the middle of August to submit written comments on the newly published Taxation Laws Amendment Bill and the Tax Administration Laws Amendment Bill.

The two draft laws, which were released in February during the budget review, seek to introduce tax reforms which allow for the introduction of tax exemptions, incentives and benefits for low income South Africans emerging into the tax paying class as well as for businesses trading beyond SA.

Among other things, the Tax Laws Amendment Bill proposes flexibility for retirement fund transfers and withdrawals, fringe benefit exemptions for lower-income employees receiving loans from their employers for low-cost housing, and clarification for the conversion of debt to equity.

Government is already considering a host of other tax law amendments, including changes to reflect cryptocurrencies as a "financial instrument" and "financial service" in terms of the Income Tax Act.

Government is also looking to incentivise domestic investment of capital using section 12 J of the Income Tax Act, which allows investment in local venture capital funds.

The Tax Administration Laws Amendment Bill’s proposals include removing a requirement to submit tax returns for South Africans receiving a tax-exempt dividend, clarifications on handling incorrect invoices for value-added tax refunds, and the collection of value-added tax payments.

In a statement, National Treasury said it and SARS would accept submissions from South Africans, organisations and business at large until August, when Parliament would begin engaging with the bills.

"National Treasury and SARS welcome written public comment on the tax proposals contained in the bills. After receipt of the comments, National Treasury and SARS will invite all those who provided inputs to attend further workshops to discuss the issues raised in greater detail," the statement said.

National Treasury said Parliament would initiate its own public hearings and consultations processes after it and SARS finished collecting written comments submitted to them by mid-August.

"National Treasury and SARS will thereafter publish a response document to provide formal written responses to the queries on the bills and will prepare revised versions of the Tax Laws Amendment Bill and Tax Administration Laws Amendment Bill, which incorporate changes arising from these engagements," the statement said.

National Treasury said the draft Tax Laws Amendment Bill contained a proposal to extend the Employment Tax Incentive for a further term of five years.

"This proposal is subject to further consultation and review.

"As part of the review of this programme, a round of consultations with social partners has been convened by the NEDLAC (National Economic Development and Labour Council) secretariat," the statement said.

Treasury said once the written submissions were collected, the current draft bills, the response document and the revised bills would be presented to the Standing Committee on Finance and the Select Committees on Finance before they were tabled in Parliament. 

The statement added that amendments to the bills may be effected by recommendations made by the Davis Tax Committee’s panel reviewing the current list of VAT zero-rated items.

"The independent panel was established on 29 March 2018 and has received public submissions and held hearings, and is preparing a report to provide to the Minister of Finance by the end of July 2018," the statement said.

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