Treasury publishes new tax bills for comment

The National Treasury has published the draft Taxation Laws Amendment Bill  (TLAB) and draft Tax Administration Laws Amendment Bill (TALAB) for public comment.

The TLAB and TALAB include the legislative amendments for the more complex tax proposals that were announced in the 2018 Budget Review on 21 February 2018, Treasury said.

“These bills complement the draft Rates and Monetary Amounts and Amendment of Revenues Laws Bill (Rates Bill), which was published on Budget Day on 21 February 2018. They therefore exclude the tax proposals covered in the draft Rates Bill, which covered the changes to:

  • The value-added tax rate;
  • The personal income tax brackets;
  • The medical tax credits;
  • The rate of estate duty and donations tax; and
  • Excise duties.

It added that tax bills have a different parliamentary process to other bills, with consultations taking place on the draft bills, after which they will still be formally tabled in Parliament – which is expected to be at the end of October 2018.

“National Treasury and the South African Revenue Service (SARS) welcome written public comment on the tax proposals contained in the TLAB and the TALAB. 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,” it said.

The main tax proposals contained in the draft TLAB are:

  • Providing more flexibility for the treatment of retirement fund transfers and withdrawals;
  • Introducing a fringe benefit exemption for lower-income employees who receive a loan from their employer for low-cost housing;
  • Reviewing the International Shipping exemption for purposes of accommodating the use of replacement ships;
  • Shortening the write-off period for electronic communications cables;
  • Refinements and clarification for the conversion of debt to equity;
  • The refinement of the interaction between the anti-avoidance rules for dividend stripping with corporate re-organisation rules;
  • Inserting rules addressing the use of trusts to defer tax or recharacterise the nature of income; and
  • Introduction of a one year income characterisation rule for amounts accrued to portfolios of collective investment schemes to provide certainty and limit potential abuse.

The main tax administration proposals contained in the draft TALAB relate to:

  • A removal of the requirement to submit tax returns for individuals receiving a tax-exempt dividend;
  • Anti-forestalling amendments for excise duties;
  • Clarifications on handling incorrect invoices for value-added tax refunds; and
  • Allowing the collection of value-added tax payments to apply across branches and divisions.

Read: What to do if SARS does not pay out your tax refund

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Treasury publishes new tax bills for comment