Big tax changes for South Africa – what you need to know
The National Treasury and the South African Revenue Service (SARS) have published draft tax bills and draft regulations for 2024 for public comment.
The bills and draft regulations contain tax proposals made in the 2024 Budget Speech, but have been expanded in greater detail.
Stakeholders will have until 16 and 31 August to submit comments on the proposed changes.
These proposals include:
- The 2024 draft Taxation Laws Amendment Bill (2024 draft TLAB);
- The 2024 draft Revenue Laws Amendment Bill (2024 draft RLAB);
- The 2024 draft Tax Administration Laws Amendment Bill (2024 draft TALAB);
- Draft Regulations on the method for determining the VAT liability in respect of casino table games of chance, issued in terms of section 74(2) of the Value-Added Tax Act, 1991;
- Draft Regulations on amendments to the Carbon Offset Regulations prescribing carbon offsets in terms of section 19(c) of the Carbon Tax Act, 2019; and
- Draft Regulations on domestic reverse charge relating to valuable metal in terms of 74(2) of the Value-Added Tax Act.
More general information underlying the changes in rates, thresholds or any other tax amendments can be found in the 2024 Budget Review, published by National Treasury.
The public can forward written comments to the RLAB can be submitted to Treasury and SARS by 16 August 2024, and comment on the other proposals can be submitted before 21 August.
Submissions can be sent to:
- Treasury: [email protected]
- SARS: [email protected]
Taxation Laws Amendment Bill (2024 draft TLAB) – 31 August 2024
The TLAB contains a host of clarifications and definition changes related to South Africa’s tax regime.
Some of the more notable changes are a clamp-down on companies abusing employee incentive schemes—for example, where training institutions would claim the incentive for students classified as employees under the ETI Act, who, however, never received cash payouts in their bank accounts.
There are also new measures to prevent trusts from using tax avoidance measures by transferring using low-interest or interest-free loans, advances or credit arrangements.
The list of TLAB changes is quite extensive and deals with the ‘nitty gritty’ of the country’s tax laws related to individuals, businesses and VAT. A full explanation of all the proposed changes can be read here:
Revenue Laws Amendment Bill (2024 draft RLAB) – 16 August 2024
The biggest proposals in the RLAB relate to the new two-pot retirement system, which will take effect on 1 September 2024.
In terms of this reform, retirement savings will be split into a “vested component”, “savings component” and “retirement component”.
The 2023 amendments to the retirement saving regime proposed the introduction of tax-free transfers between components, as well as various other conditions for deductions to the components.
However, the RLAB aims to clarify certain conditions—like dealing with maintenance awards, or what happens when ceasing to be a tax resident—along with the clarifications around intra-fund transfers and the like.
The full explanation on the proposals can be found here:
The 2024 draft Tax Administration Laws Amendment Bill (2024 draft TALAB) – 31 August 2024
The TALAB deals with proposes to amendments to various Acts in South Africa:
- The Income Tax Act
- the Customs and Excise Act
- the Value-Added Tax Act
- the Promotion of Access to Information Act
- the Tax Administration Act
- the Tax Administration Laws Amendment Act
The changes are largely to provide clarification on certain sections, to expand or update them to keep in line with more recent tax changes—such as the use of auto-assessments—and other administrative tweaks to assist SARS in doing its job.
The full list of proposed changes can be read here:
Focused changes
Among the proposed changes are four focused changes looking at casinos, VAT on electronic services, carbon taxes and domestic reverse charges on “valuable metals”.
The broad summaries of these changes are (explanations linked in titles):
- VAT liability for casino games: Because of the nature of casino games and games of chance, it’s difficult to determine which amounts are liable for VAT. SARS is proposing new definitions and determinations of “Gross gaming revenue” which will be subject to tax. SARS wants the changes to take effect from 1 January.
- VAT liability for electronic services: Tax changes for electronic services came into effect from 2019, but clarifications and adjustments to the tax were put on hold because of the Covid-19 pandemic. The new proposals are to clarify the tax rules for “intermediaries” that supply electronic services locally on behalf of non-resident businesses, among others.
- Carbon tax thresholds: With the major shifts in South Africa’s energy landscape—particularly the removal of the threshold for energy projects (which was 100MW before), the tax laws need to be adjusted to accommodate extending the threshold for eligible renewable energy projects for the carbon offsets under the carbon tax.
- Valuable metal changes: The government has uncovered a new modus operandi where tax dodgers are fraudulently exploiting loopholes related to “second-hand goods containing gold” to extract money from the fiscus. The proposal is now to remove “valuable metal” from the tax rules to close this loophole.
Read: The hidden ‘luxury’ tax South Africans pay on all cars over R250,000
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