31 October 2019
The 2019 Taxation Laws Amendment Bill (TLAB) and the 2019 Tax Administration Laws Amendment Bill (TALAB) have been tabled in parliament.
According to an earlier national treasury statement, the 2019 TLAB and the 2019 TALAB provide the necessary legislative amendments required to implement the more complex tax announcements made in Chapter 4 and Annexure C of the 2019 Budget Review.
The 2019 TLAB focuses on the following key tax proposals announced in the 2019 Budget Review:
• Aligning the effective date of tax neutral transfers between retirement funds with the effective date of annuitisation for provident funds
• Adjusting the withholding tax treatment of surviving spouses’ pensions to limit tax debts on assessment
• Addressing abusive arrangements aimed at avoiding the anti-dividend stripping provisions
• Clarifying the interaction between corporate reorganisation rules and other provisions of the Income Tax Act
• Refining the tax treatment of long-term insurers
• Refining investment criteria and anti-avoidance measures for the Special Economic Zone regime
• Limiting the allowable deduction for investors investing in a venture capital company
• Reviewing the controlled foreign company comparable tax exemption and addressing the circumvention of the anti-diversionary rules
• Reviewing section 72 of the VAT Act
The 2019 Draft TALAB gives effect to the following key tax proposals:
• Removal of requirement to submit a declaration to a regulated intermediary in respect of tax free investments
• Authorisation for the Commissioner to prescribe rules relating to the making of advance foreign currency payments
• Alignment of time limitations on requesting refunds
• Model mandatory disclosure rules and non-compliance penalties
• Tax compliance certificates
The 2019 Rates and Monetary Amounts and Amendment of Revenue Laws Bill has also been tabled.
Highlights in the 2019 Rates Bill include changes in rates and monetary thresholds to the personal income tax tables, adjustments to the eligible income bands that qualify for the employment tax incentive and increases in excise duties for alcohol and tobacco.
The Adjustments Appropriation Bill has also been tabled.
It aims to effect adjustments to the appropriation of money from the National Revenue Fund for the requirements of the state in respect of the 2019/20 financial year.
The Division of Revenue Amendment Bill has also been tabled.
It seeks to amend the Division of Revenue Act of 2019 in accordance with the money bills and related matters act of 2009.
Meanwhile, treasury briefed parliament on responses to the submissions on the 2019 Tax Bills.
The process to tax electronic cigarettes and tobacco heating products will be completed in consultation with the health department.
Treasury has proposed that the amendment reviewing the tax treatment of surviving spouse pensions will come into effect on 1 March 2021 to allow more time to adjust systems.
Treasury has also proposed that changes be made in the 2019 TLAB so that the specific list that was available in the Income Tax Act before the proposed changes on variable remuneration be reinstated and updated to cater for certain amounts that are not currently included in the list.
Changes have also been introduced to clause 30 of the TLAB on refining provisions around special interest deduction for debt funded share acquisitions, clause 31 on clarifying inconsistencies in the current REIT tax regime, clause 18 on refining the Special Economic Zones tax incentive regime, clause 17 on reviewing the allowable deduction for investors investing in a venture capital company, clause 77 on refinement of the employment tax incentive regime and clauses on the VAT treatment of foreign donor funded projects.