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    National Treasury on Taxation Laws Amendment Bill 2008 for public comment

    Media statement on Taxation Laws Amendment Bills, 2008: General Overview

    20 February 2008

    The Minister of Finance is releasing the draft Taxation Laws Amendment Bills, 2008, today for public comment. The draft bills may be obtained from the National Treasury (http://www.treasury.gov.za) or South African Revenue Service (SARS) (http://www.sars.gov.za) websites. This legislation, together with the Revenue Laws Amendment Bills (due later in 2008), will give effect to the tax proposals presented by the Minister of Finance in the 2008 National Budget as tabled in Parliament on 20 February 2008. This set of bills deals with the rates, thresholds, urgent policy and administrative matters as well as technical corrections. The more complex policy proposals announced will be addressed in the Revenue Laws Amendment Bills after further consultation.

    More specifically, the bills released today deal with the following key matters:

    1. Rates and thresholds

    The main purpose of the bills is to give effect to the rates and thresholds so these items can formally go into effect as soon as possible in accordance with the mandate provided in the 2008 Budget Review. The full list of rates and threshold changes involving the Income Tax and Value-Added Tax Acts are attached as an annexure for easy reference (see http://www.treasury.gov.za/comm_medi...2008022101.pdf).

    2. Urgent policy matters:

    a. Pensions: The proposed legislation clarifies pension tax administration by codifying and clarifying key pension practices and interpretations within the Income Tax Act. The legislation also paves the way for much of the regime to be shifted to the Pensions Act so that regulation is mainly handled by the Financial Services Board (rather than dual oversight by the Financial Services Board and the South African Revenue Service).

    b. Skilled expatriates: Relief is granted to skilled expatriates working temporarily in South Africa. These expatriates can now receive employer-provided accommodation for a period of two years without being subject to fringe benefits tax. This exemption is subject to a ceiling equal to the lesser of 25 % of salary or R25 000 per month.

    c. Anti-avoidance: The proposed legislation closes certain pressing domestic and cross-border restructuring schemes. This aspect of the legislation is addressed in another simultaneous media release called "Taxation Laws Amendment Bills, 2008: Company Restructuring Measures."

    3. Administrative matters:

    a. Administrative penalties

    The current penalty system does not appropriately cater for less serious procedural and administrative non-compliance. The legislation will provide an enabling framework for a more objective penalty system to be introduced with certain criteria to be determined by regulation.

    b. Tax return filing
    In line with international practice several amendments are proposed to underpin the simplification of individual income tax returns. These include the removal of legislative requirements for the attachment of supporting documentation to returns, greater flexibility with respect to employee tax returns and the introduction of a penalty for the failure to submit annual reconciliations of employee's tax.

    Note: An Explanatory Memorandum is also published to assist in interpreting and understanding the above bills at a more detailed level.

    Public Comments and Parliamentary Hearings

    The National Treasury is scheduled to brief the Parliament's Portfolio Committee on Finance on the draft legislation on 4 March 2008. Parliament will through its processes request public comments on the draft Bill, and thereafter hold public hearings on 5 March 2008. Whilst all comments should be submitted to the Parliamentary Portfolio Committee of Finance, members of the public are also invited to send the same comments to the National Treasury directly, before 5
    March 2008 (and hence before the public hearings).

    Comments should be directed to:
    Jeanne Viljoen
    E-mail: jeanne.viljoen@treasury.gov.za
    Fax: 012 315 5516
    Please ensure that the comments reach us by 5 March 2008.

    More...
    Last edited by Dave A; 22-Feb-08 at 04:34 PM.

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