National Treasury
Parliament has sent the Tax Administration Bill together with the Taxation Laws Amendment Bills to the president for assent.
The Tax Administration Bill was tabled in Parliament in June this year while the two Taxation Laws Amendment Bills were tabled in October.
The national council of provinces (NCOP) passed the two Taxation Laws Amendment Bills on the 30 November.
The Tax Administration Bill was passed by the NCOP this week.
Some of the key objectives of the bill include:
• Put clear rules in place to cover the life cycle of a taxpayer
• Protect the fiscus
• Ensure that tax payments are made where required
• Facilitate heightened levels of compliance
• Provide for consistency in terms of compliance
• Modernise tax products and processes
In a media statement released at the time of the tabling, the bill was described as an attempt to “simplify, to provide greater certainty and better coherence in South African tax administrative law”.
The bill incorporates into one piece of legislation “certain generic administrative provisions and attempts to eliminate duplication, remove redundant provisions and align disparate requirements that currently exist in different tax acts”.
The proposed legislation will increase the South African Revenue Services’ (SARS) powers to go after tax evaders. “Stricter enforcement, assessment and collection powers will be imposed”.
A single register for all taxpayers is to be set up.
The bill aims to bring about a better balance between SARS and taxpayers.
In essence, the bill seeks to “balance the powers and duties of SARS with the rights and obligations of taxpayers in order to enhance equity and fairness in tax administration by providing a single body of law that outlines common procedures in a transparent relationship”.
The proposed creation of a tax ombud is a key objective of the bill.
The envisaged ombud will be tasked with hearing taxpayers’ complaints and authorising search and seizure without a warrant under limited circumstances, amongst others.
As regards the two Taxation Laws Amendment Bills, they give effect to most of the 2011 budget review tax proposals announced during the budget vote speech in February.
The two bills consist of a money bill and an ordinary bill covering administration.
Highlights of proposed changes contained in the bills include:
• To introduce a tax credit system as from 1 March 2012 for medical scheme contributions-discussion document to be released next week
• Allow additional entities to offer living annuities- to be known as retirement income drawdown accounts
• All road accident fund payments to be exempt from tax-lump sum and annual payments
• Dividends tax of 10% on dividends paid to replace secondary tax on companies-from 1 April 2012
• Foreign dividends to be taxed in the same way as domestic dividends
• The suspension of section 45 rollovers from 3 June 2011 until the end of 2012-this was not announced in budget-a new development-to deal with growing tax avoidance
• Introduce a government Sukuk in terms of Islamic finance
• The removal of the potential for double taxation by South African multinationals operating abroad
• Introduce limited foreign tax credit
• Adjust foreign tax rebate rules
Sabinet Cape Town Office
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