Public comment sought on draft tax laws

Thursday, July 20, 2017

Treasury and the South African Revenue Service (SARS) have published the 2017 Draft Taxation Laws Amendment Bill (TLAB) and the 2017 Draft Tax Administration Laws Amendment Bill (TALAB) for public comment.

“Together with the 2017 Draft Rates and Monetary Amounts and Amendment of Revenues Laws Bill (Rates Bill) published on 22 February 2017, these three draft bills give effect to the tax proposals announced on Budget Day 22 February 2017, as published in the Budget Review,” said National Treasury.

The two draft bills released on Wednesday include most of the more complex and administrative tax proposals. They exclude the proposals dealt with in the 2017 Draft Rates Bill, such as changes to the personal income tax brackets and rates and excise duties, and the introduction of the Health Promotion Levy (the proposed sugary beverage tax).

Among the main proposals of the draft TLAB are a levy on bargaining councils to address non-compliance and a higher fringe benefit exemption for bursaries to learners with disabilities.

The other proposals include addressing the circumvention of anti-avoidance rules dealing with share buy backs, dividend stripping and contributed tax capital.

Meanwhile, the main tax administration proposals contained in the 2017 Draft TALAB relate to assisting micro businesses transitioning into the small business corporation system and employees’ tax and reimbursement of travel expenses.

The proposals also relate to the application of the cap on deductible retirement fund contributions, the taxation of interest payable in respect of normal tax by SARS as well as phased implementation of the Tax Administration Act, 2011, interest rules by tax type among others.

“Due to constitutional requirements related to the definition of a money Bill, the draft tax amendments are split into two separate bills, namely, a money bill, as required in terms of section 77 of the Constitution, dealing with national taxes, levies, duties and surcharges (the 2017 Draft Rates Bill and 2017 Draft TLAB), and an ordinary bill as required in terms of section 75 of the Constitution, dealing with tax administration issues (the 2017 Draft TALAB),” said Treasury.

Both the draft TLAB and draft TALAB are published for public comment prior to their formal introduction in Parliament.

Public hearings

The Standing Committee on Finance will convene public hearings on the draft bills before their formal introduction in Parliament.

“National Treasury and SARS hereby invite written comments on these draft Bills. Subsequently, National Treasury and SARS will engage stakeholders submitting comments through workshops to be held in late August 2017, where the written comments require greater detail or more information,” said Treasury.

Following that, around the end of September 2017, a response document providing written responses on comments received will be presented to the Standing Committee on Finance.

The bills will then be revised, taking into account public comments, before they are introduced in the National Assembly and formally considered by the Standing Committee on Finance and thereafter the Select Committee on Finance in the National Council of Provinces.

The draft legislation and the draft explanatory memorandum containing a comprehensive description of the draft amendments can be found on the National Treasury and SARS websites. –

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