Briefing parliament on the 2021 Budget yesterday, national treasury emphasized that it strikes a difficult balance between providing immediate support for the economy and shoring up the country’s public finances.
Treasury added that the medium-term fiscal policy focuses on extending temporary support in response to COVID-19, narrowing the budget deficit and stabilizing debt and continuing to rein in non-interest expenditure growth while improving the composition of spending.
Treasury pointed out that returning public finances to a sustainable position will “require ongoing restraint in spending growth and implementation of structural reforms to support economic growth”.
The current fiscal strategy is focused on reducing growth in the salary bill and decreasing the share of spending on public-service wages over the medium term while sustaining small real spending increases on other items.
Treasury stressed that significant risks remain for the economic and fiscal outlook.
Risks to the fiscal framework include new waves of Covid-19 infections and associated disruptions to economic activity, a failure to maintain salary budget ceilings, weak financial positions in public entities and local government and medium-term debt redemptions of state-owned companies totaling R182.8 billion.
Meanwhile, the Financial Sector Conduct Authority has published the penalty for failure to furnish returns, information or documents in the insurance sector:
The amount is adjusted annually in order to reflect the consumer price index.
In Gazette 44193, the South African Revenue Service (SARS) published an amendment to Schedule 1 of the Customs and Excise Act:
• Gazette 44193 – Notice 146 – Amendment to Part 6 of Schedule No. 1, by the substitution of the export tax rates under export tax item 193.00, as promulgated in the Taxation Laws Amendment Act, 2020, on 20 January 2021 – with effect from 1 August 2021.
In a separate matter, SARS has announced the setting up of a separate unit to focus on Individual taxpayers with wealth and complex financial arrangements.
The unit, to be known as High Wealth Individual Taxpayer Segment, will initially be co-located with the Large Business and International Taxpayer Segment.
SARS points out that it has been paying particular attention to taxpayers with undeclared offshore holdings to enhance compliance.
“As an early adopter of the international standard for the Automatic Exchange of Financial Account Information, SARS has at its disposal information relating to offshore account holdings of South African taxpayers, some which seems not to have been declared. The information that has come into our possession shows possible non-compliance by a number of these taxpayers.”
SARS plans to write to affected taxpayers to request information about their offshore holdings.
“The request is for relevant material for risk assessment purposes that does not signal the commencement of an audit process but may inform future action.”