Treasury Gives Responses to Comment on Draft Tax Bills

National Treasury

National treasury revealed this during a briefing on draft responses to submissions on the Draft Taxation Laws Amendment Bill (TLAB) and the Draft Tax Administration Laws Amendment Bill (TALAB) in parliament.

Treasury added that “taxpayers should also state the cash tax impact (by using last year’s financial statement figures) after taking into account the proposed allowance so as to determine an appropriate phasing-in period.”

Other proposals from stakeholders that treasury has agreed to with regard to the draft TLAB include that the connected person exclusion similar to the current paragraph 5(3A) of the Seventh Schedule will be included so as to avoid abuse, the word “remit” will be removed from paragraph (a)(i) of the definition of “concession or compromise”, paragraph (a)(ii) of the definition of “concession or compromise” will be rephrased so that the connected person element can only be applied in respect of debt redemptions, amendments will be made to paragraph 12A of the Eighth Schedule to the Act to clarify that the redetermination rules apply to both capital and allowance assets, the legislation will specify that a simple basis of determination is applicable when determining an extraordinary dividend for preference shares, proposed wording to the investment income test for start-up companies will be amended to further clarify policy intent and the 50 per cent participation requirement in the proposed section 7(8) and 25B of the 2018 Draft TLAB will be extended to the proposed sections as to align the proposed amendments to section 7(8) and 25(2A).

As regards the draft TALAB, treasury has agreed to reconsider the proposed amendment of the definition of “provisional taxpayer” for the 2019 legislative cycle, a new wording of the proposed amendment on correction of tax invoices and a new wording of the proposed amendment on deregistration of tax non-compliant tax practitioners.

Treasury also provided draft responses to the 2018 Draft Rates and Monetary Amounts and Amendment of Revenue Laws Bill.

The responses focused on non-VAT issues.

It is proposed that changes be made in the 2018 Draft Rates Bill and the implementation date for the proposed draft regulations prescribing E-Services be moved to the 01 April 2019 to allow sufficient time to businesses to make the required adjustments.

Treasury also proposed that the registration threshold for the purposes of electronic services be aligned with the registration threshold for domestic supplies and be increased from R50 000 to R1 million.

According to treasury, the Draft Carbon Tax Bill is also ready to be tabled.

Changes to the draft bill following submissions include the deduction of petrol and diesel related emissions, taxation of domestic aviation and revision of allowances and waste-related submissions.

Meanwhile, the finance minister, Nhlanhla Nene, has confirmed that cabinet has “agreed that fiscal sustainability must remain the focus of government’s efforts in public finance management.”

The comment was made with reference to the upcoming medium term budget policy statement in October 2018.

Speaking at Moody’s Annual Sub-Saharan Africa Summit in Johannesburg, the minister added that it was important that “government protects the composition of spending ensuring that resources are directed towards service delivery.”

Sabinet Cape Town Office

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