27 November 2019
The Rates and Monetary Amounts and Amendment of Revenue Laws Bill [B17-2019], Taxation Laws Amendment Bill (TLAB) [B18B-2019] and the Tax Administration Laws Amendment Bill (TALAB) [B19-2019] have been passed by the national assembly and sent to the national council of provinces for concurrence.
The bills were tabled in parliament during the Medium Term Budget Policy Statement on 30 October 2019.
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
According to the standing committee on finance’s report on the bill, technical corrections were made to clause 8 following a letter from the finance minister.
The corrections relate to the definition of “hybrid equity instrument”, which is aimed at clarifying the scope of that definition.
The 2019 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
Highlights in the 2019 Rates and Monetary Amounts and Amendment of Revenue Laws 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 select committee on finance will process the bills.