5 new laws being finalised for South Africa – including changes to taxes and pensions

The Standing Committee on Finance has opened several pieces of financial legislature for public comment.

The Bills open for public comment are:

• The 2023 Draft Revenue Laws Amendment Bill;
• The 2023 Draft Revenue Administration and Pension Laws Amendment Bill;
• The 2023 Draft Rates and Monetary Amounts and Amendment of Revenue Laws Bill (2023 Draft Rates Bill);
• The 2023 Draft Taxation Laws Amendment Bill (2023 Draft TLAB); and
• The 2023 Draft Tax Administration Laws Bill (2023 Draft TALAB).

These Bills primarilty give effect to changes announced in the February budget, but also include changes to tax collection, South Africa’s new two-pot retirement system, excise taxes on alcohol and tobacco and many other things.

Written Submissions on the Bills must be emailed by 12h00 on Monday, 18 September 2023, to Allen Wicomb at [email protected] and Teboho Sepanya at [email protected].

There will also be public hearings on the Bills on Tuesday 19, and Wednesday 20 September 2023 via Zoom.

The Parliamentary Monitoring Group has provided a detailed breakdown of all the laws:

Draft Revenue Laws Amendment Bill and the Draft Revenue Administration and Pension Laws Amendment Bill

The new Draft Revenue Laws Amendment Bill states that the new “two-pot retirement system” will become operational on 1 March 2024. The new system will allow South Africans to put their retirement savings into two separate pots.

The “savings pot” will allow for up to one-third of all retirement savings and will be accessible once a year, whilst a “retirement pot” will receive two-thirds of all contributions and only be accessible upon retirement age.

The new Bill also allows for seed capital to be taken from an existing retirement fund (the vested pot) to the retirement pot – limited to 10% of the existing fund or R25,000, which should reduce the adverse effect on liquidity.

Below are the changes legislative changes (mobile users can click on this hyperlink):

Draft Rates Bill

This Bill will introduce changes in rates and monetary thresholds to the personal income tax tables, while also changing the monetary threshold for transfer duties.

In addition, despite the Department of Health working on new laws to limit the use of tobacco, the Bill also increases the excise duties on alcohol and tobacco.

The Bill can be found below:

Draft TLAB:

The Draft TLAB includes the Rooftop Solar tax incentive, which is limited to 25% of the actual cost of the solar panels – to a limited amount not exceeding R15,000.

The Draft Bill also has a Renewable energy tax incentive, a research and development tax incentive, and a Urban Development Zone tax incentive.

It also provides clarity on anti-avoidance rules dealing with third-party backed shares, refines the provisions applicable to unbundling transactions, explains the foreign business establishment exemption for controlled foreign companies and makes the participates exemption for the sale of shares in foreign companies clearer.

It also reviews the VAT treatment of specific supplies in the short-term insurance industry and prepaid vouchers in the telecommunications industry.

The Bill can be found below:

Draft TALAB

The Draft TALAB provides a host of changes for SARS’s operations. For instance, it changes the employee tax registration requirement for non-resident employers. It also changes the employee’s tax withholding in regard to remuneration.

There has also been a time period expansion for the time period to submit a return for a taxpayer that disagrees with their auto assessment.

There is also a proposed single window for advance passenger information and passenger name record data, whilst SARS will not also get a new online traveller management system.

In addition, there is a further alignment on anti-money laundering and the combatting of terrorist developments, which should help South Africa in its bid to get off the grey list.

The Bill can be found below:

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