(Extract from the Medium Term Budget Policy Statement)
In terms of Disaster Management Act relief measures, three payment dates still apply:
With the intention of making it easier to comply with tax obligations, SARS is embarking on an outbound call campaign to assist taxpayers to file their tax returns virtually, either by a telephone or video call.
The deduction available for donations increased
Gazetting of Trade Exposure and Greenhouse Gas Benchmark Regulations and Renewable Energy Premium Notice in Terms of the Carbon Tax Act
The Minister of Finance published on Friday, 19 June 2020 the regulations for the trade exposure and greenhouse gas (GHG) emission intensity benchmark performance allowance, and the notice for the renewable energy premium, in terms of the Carbon Tax Act
In line with the President’s address to the nation on 21 April 2020, the Minister of Finance has provided more detail on the second set of measures that aim to assist individuals and businesses through the pandemic. The interventions include:
The Minister of Finance has announced the following exceptional tax measures as part of the fiscal package outlined by President Cyril Ramaphosa on 23 March 2020 in his speech on the Escalation of Measures to Combat COVID-19. These measures are over and above the tax proposals made in the 2020 Budget on 26 February 2020. The tax adjustments are made in light of the National State of Disaster and due to the significant and potentially lasting negative impacts on the economy from the spreading of the COVID-19 virus. There is a critical need for government interventions to assist with job retention and assist businesses that may be experiencing significant distress. These measures include:
Deferral Of The Payment Of Provisional Tax Liability For Tax Compliant Small To Medium Sized Businesses
In order to assist with alleviating cash flow burdens arising as a result of the COVID-19 outbreak, Government proposes the following tax measures for tax compliant small to medium sized businesses, for a period of twelve months, beginning 1 April 2020 and ending on 31 March 2021:
In order to minimise the loss of jobs during this critical period, Government proposes expanding the ETI programme for a limited period of four months, beginning 1 April 2020 and ending on 31 July 2020 as follows:
Deferral Of The Payment Of Employees’ Tax Liability For Tax Compliant Small To Medium Sized Businesses
In order to assist with alleviating any cash flow burden arising as a result of the COVID-19 outbreak, Government proposes the following tax measures for tax compliant small to medium sized businesses, for a limited period of four months, beginning 1st April 2020 and ending on 31st July 2020:
In light of the Covid-19 outbreak SARS has announced a number of operational changes as detailed below.
In his 2020 Budget speech, Minister Mboweni announced the formation of a Biz Portal which would allow one to complete all the necessary registrations for the formation of a business. This facility is now available and is best described as follows:
Revenue for 2019/20 is now R63.3 billion lower than the estimate at the time of the 2019 Budget.
To promote economic growth, government intends to restructure the corporate income tax system over the medium term by broadening the base and reducing the rate. Broadening the base will involve minimising tax incentives, and introducing new interest deduction and assessed loss limitations. Rate reductions will be implemented in a revenue-neutral manner.
Increasingly, governments and businesses recognise that the world faces a climate crisis, and acknowledge the need for partnerships to limit global warming to below 1.5° C. As the Paris Agreement becomes operational in 2020, signatories will submit revised nationally determined contribution commitments to mitigate climate change. A range of legislation and policies are being developed to meet South Africa’s commitments in this regard.
“The Aloe Ferox survives and thrives when times are tough. It actually prefers less water. It wins even when it seems the odds are against it. "
A good start to the new year when the Reserve bank announced a surprise reduction of 25 basis points to the repo rate. Good news for those with borrowings and the forecast is that we should get another cut in the 4th quarter 2020.
South Africa will be holding its breathe at 14h00 Wednesday 26th February 2020 as Minister Mboweni presents his Budget for the 2021 financial year. There literally can only be bad news as the whole country is going to be affected by whatever reforms will be announced, but without these reforms South Africa will undoubtedly fail, so we need to make short to medium term sacrifices. There will be increased taxes, what shape or form is anyone’s guess. But this needs to be accompanied with a reduced Government wage bill and holes plugged in our leaking State-Owned Entities.
Gazetting of the Carbon Offsets Regulations in Terms of the Carbon Tax Act and Related Draft Regulations for Public Comment
The Carbon Tax Act (Act No. 15 of 2019) was signed into law by the President in May 2019 and came into effect from 1 June 2019. In terms of section 19(c) of the Carbon Tax Act, the Carbon Offsets Regulation was gazetted on Friday 29 November 2019 (Gazette No. 42873) and is available on the National Treasury website.
Large fiscal deficits incurred over the years, although providing short-term support to the economy, have not resulted in commensurate long-term economic growth. This has led to sharp increases in the government’s debt-to-GDP ratio, which currently stands at 60.8 per cent, and is expected to rise to 71.3 per cent in 2022/23. The growing proportion of limited public resources spent on interest payments are crowding out spending on social and economic investment.
The 2019 MTBPS has been presented by Minister Tito Mboweni. His opening statement was a reference to the Aloe Ferox plant he brought to Parliament when presenting the February 2019 budget.
Unlike conventional trusts, which are taxed at a flat rate of tax, a special trust is taxed on the same sliding scale applicable to natural persons. For tax purposes the following types of special trusts are recognised: