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.
In a statement on Monday, Treasury said Parliament will communicate the specific dates for the public consultations on the TLAB and TALAB, which is expected to be next month.
“It should be noted 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,” said Treasury.
Public comments on the draft bills close at the end of business on 16 August.
“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,” said Treasury.
Parliament will also initiate its own hearings and consultations processes after mid-August.
National Treasury and SARS will thereafter publish a response document to provide formal written responses to the queries on the bills and will prepare revised versions of the TLAB and TALAB, which incorporate changes arising from these engagements.
“The current version of the bills, the response document and the revised bills will be presented to the Standing and Select Committees on Finance before they are tabled in Parliament,” 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.