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President Ramaphosa Signs 2018 Tax Acts

January 21, 2019

The Presidency

The Taxation Laws Amendment Act (TLAA), Tax Administration Laws Amendment Act (TALAA) and Rates and Monetary Amounts and Amendment of Revenue Laws Act have all been assented to by president Ramaphosa.

The bills were tabled in parliament during the Medium Term Budget Policy Statement in October 2018.

Some of the main tax proposals contained in the TLAA include 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, 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 proposals contained in the TALAA include the 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.

Other issues dealt with that arise from previous legislative commitments include extension of the employment tax incentive, annuitisation for provident fund members and review panel for VAT zero-rated items.

The Rates and Monetary Amounts and Amendment of Revenue Laws Act seeks to:

• fix the rates of normal tax;
• amend the Estate Duty Act, 1955, so as to amend the rate of estate duty;
• to amend the Income Tax Act, 1962, so as to amend rates of tax and monetary amounts;
• amend the Customs and Excise Act, 1964, so as to amend rates of duty in Schedule 1 to that Act;
• amend the Value-Added Tax Act, 1991, so as to amend the rate of the Value-Added Tax;
• amend a provision so as to provide for more efficient taxation of electronic commerce; and
• provide for matters connected therewith.

The Special Appropriation Act has also been signed by the president.

The bill was tabled during delivery of the Medium Term Budget Policy Statement on 24 October 2018.

The act provides for the appropriation of an additional amount of money (R5bn) for the requirements of the department of public enterprises to settle the debt obligations of the South African Airways SOC Limited; and to provide for matters connected therewith.

The Adjustments Appropriation Act has also been assented to.

It seeks to effect adjustments to the appropriation of money from the National Revenue Fund for the requirements of the state in respect of the 2018/19 financial year.

The Money Bills Amendment Procedure and Related Matters Amendment Act has also been signed by the president.

The act flows from a committee bill drawn up by the standing committee on finance.

It aims to amend the Money Bills Amendment Procedure and Related Matters Act of 2009 in order to:

• amend and insert certain definitions;
• clarify which instruments the Act apply to;
• correct the powers and functions of the committees dealing with matters related to the Act;
• clarify and amend the procedure, resultant reporting and periods involved in the amendment of money Bills and division of revenue Bills and related fiscal instruments;
• repeal certain provisions;
• establish the Parliamentary Budget Office as a juristic person and to strengthen the accountability model of the Parliamentary Budget Office; and
• provide for matters connected therewith.

The Division of Revenue Amendment Act has also been assented to by president Ramaphosa.

The act seeks to amend the Division of Revenue Act of 2018 in accordance with the Money Bills Amendment Procedure and Related Matters Act of 2009.