Taxpayers who have a dispute with the South African Revenue Service (SARS) can now benefit from new rules that aim to simplify and expedite the resolution process. The new rules, which came into effect on 1 July 2023, replace the previous dispute resolution rules that were in place since 2003.
The tax incentive available for businesses to promote renewable energy will be temporarily expanded to encourage rapid private investment to alleviate the energy crisis. The current incentive allows businesses to deduct the costs of qualifying investments over a one- or three-year period, which creates a cash flow benefit in the early years of a project. Businesses are able to deduct 50 percent of the costs in the first year, 30 percent in the second and 20 percent in the third for qualifying investments in wind, concentrated solar, hydropower below 30 megawatts (MW), biomass and photovoltaic (PV) projects above 1 MW. Investors in PV projects below 1 MW are able to deduct 100 percent of the cost in the first year.
“Democracy will have little
Taxpayers, your turn to file your tax return starts on 1 July this year. The good news is that a significant number of individual taxpayers will be auto-assessed again this year, and this process will start in July. You will be sent an SMS if you are selected to be auto-assessed. When you receive the SMS, log into eFiling or MobiApp to view your assessment. If you agree with the assessment there is nothing more to do.
The Bounce Back Support Scheme, a loan guarantee mechanism of R15 billion which was first highlighted in the February 2022 budget speech, has come into effect in April 2022. The scheme aims to facilitate job creation and economic growth in the wake of shocks such as the Covid-19 lockdowns, the July 2021 civil unrest in Kwa-Zulu Natal and Gauteng, and the ongoing flood disaster.
The Minister of finance Enoch Godongwana tabled his Budget review on the 23rd February 2022. The following were the key tax issues arising.
The South African budget process is a meticulous and continuous cycle that ensures government spending aligns with the country's policy goals and objectives. This process begins with the Budget Speech and culminates in parliamentary ratification, involving several critical steps along the way.
In a significant move to bolster its climate change mitigation efforts, South Africa has announced an increase in its carbon tax. Effective from January 1, 2025, the carbon tax will rise from R190 to R236 per tonne of carbon dioxide equivalent (tCO2e). Additionally, from April 2, 2025, the carbon fuel levy will increase by 3c/litre to 14c/litre for petrol and 17c/litre for diesel, as mandated by the Carbon Tax Act of 2019.
In a significant move to boost revenue, the South African government has announced a two-phase increase in the Value Added Tax (VAT) rate. The first increase of 0.5 percentage points will take effect on 1 May 2025, followed by another 0.5 percentage point increase on 1 April 2026. This decision comes after careful consideration of the potential contributions of various tax instruments, with VAT being identified as an efficient and broad-based source of revenue.
The 2025 Budget Speech addressed the economic stagnation of the past decade, with GDP growth averaging less than 2%. In 2024, the economy grew by only 0.6%, and medium-term projections estimate an average growth of 1.8%. The speech emphasized the need for faster, inclusive economic growth to meet developmental goals.
The South African Revenue Service (SARS) has announced a significant milestone in the implementation of the two-pot system, with a total of 2,664,279 applications for tax directives received to date. Of these, 2,403,379 applications have been approved, resulting in a total gross lump sum payout of R 43.42 billion.
The South African Revenue Service (SARS) has issued a call for public input on the upcoming 2025 Budget. Finance Minister Enoch Godongwana will deliver the National Budget Speech in February 2025, and the government is seeking suggestions from South Africans on various budget-related topics.
Obtaining a tax directive from the South African Revenue Service (SARS) is a crucial step for employers, fund administrators, and insurers to ensure the correct deduction of employees' tax from lump sum payments. This process is essential for managing tax liabilities on retirement funds, severance packages, and other lump sum benefits.
The South African Revenue Service (SARS) has announced key updates for the 2024 tax filing season, which commenced on July 1, 2024. This year, SARS will continue issuing auto-assessments for taxpayers with simpler tax affairs. Taxpayers are advised to check their auto-assessment status via eFiling or the SARS MobiApp, following an SMS or email notification.
Starting from 1 September 2024, individuals planning to withdraw from the savings pot of the Two-Pot Retirement System must be registered for tax. Unregistered individuals must complete their registration before applying to their relevant fund, as unregistered requests will be rejected by SARS.
SARS has introduced a comprehensive draft guide outlining tax incentives to boost renewable energy generation. Taxpayers can benefit from accelerated deductions, enhanced deductions for new assets, and deductions for expenses related to infrastructure construction. These incentives aim to encourage investment in renewable energy projects, support sustainable practices, and drive economic growth in the renewable energy sector.
In a recent development, the South African Revenue Service (SARS) has issued a Binding General Ruling (Income Tax) 73 on the 30th of July 2024, shedding light on the meaning of taxable income for the purpose of setting off the balance of an assessed loss by companies. This ruling aims to provide clear guidance on the limitation of set-off for companies under section 20(1)(a)(i) as amended by the Taxation Laws Amendment Act 20 of 2021.
National Treasury expressed its satisfaction as the President signed the Pension Funds Amendment Act (31 of 2024) into law, marking the final step in implementing the two-pot system set to begin on 1 September 2024. This act introduces crucial changes to various pension-related laws, including the Pension Funds Act of 1956 and the Government Employees Pension Law of 1996, essential for retirement funds, including public sector funds, to adopt the two-pot reform.
The South African Revenue Service (SARS) has recently made an important announcement regarding the upcoming Filing Season. In line with their commitment to making the process easier and more convenient for taxpayers, SARS will be implementing auto-assessment for a larger pool of taxpayers this year. Additionally, they have introduced various digital platforms to facilitate seamless interactions with taxpayers. Here is an overview of the announcement and highlights the key points for taxpayers to take note of.
In April 2024, an automated process for Trust taxpayers was introduced on eFiling to electronically submit documentation to lodge a dispute via a fully guided process.
The Tax Chronology of South Africa: 1979–2024 provides a comprehensive overview of the current and historical rates for various taxes, duties, and levies collected by the South African Revenue Service (SARS). This publication covers the period from 1979 to 2024 and includes details on tax rates, duties, and levies.
As an employer, it’s essential to stay informed about your tax obligations. The Employer Annual Declaration period is a crucial time when you need to submit accurate information to the South African Revenue Service (SARS). Let’s dive into the details:
The Minister of Finance, Mr. Enoch Godongwana, tabled his budget review on 21st February 2024. While tax revenue performed well in 2021/22 and 2022/23 due to high commodity prices, revenue for 2023/24 is now expected to fall short by R56.1 billion. Government has proposed tax increases totalling R15 billion in 2024/25 to alleviate immediate fiscal pressures, while limiting the impact on economic growth. The following were the key tax proposals:
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