The government in August published the Draft Taxation Laws Amendment Bill (TLAB) and Draft Tax Administration Laws Amendment Bill (TALAB) for comment.
There is a lot of information in these Bills including (source gov.za):
Key tax proposals contained in the 2020 Draft Rates Bill include the following:
- Changes in rates and monetary thresholds to the personal income tax tables
- Adjustment of transfer duty rates to support the property market
- Increases of the excise duties on alcohol and tobacco
Key tax proposals contained in the 2020 Draft TLAB include the following:
- Proposed introduction of export taxes on scrap metals
- Tax measures required as a result of the modernisation of the foreign exchange control system
- Aligning the carbon fuel levy adjustment with the Carbon Tax Act
- Allowing a carbon tax “pass through” for the regulated liquid fuels sector
- Addressing an anomaly in the tax exemption of employer provided bursaries
- Clarifying rollover relief for unbundling transactions
- Consequential amendments as a result of 2019 changes to section 72 of the VAT Act
Key tax proposals contained in the 2020 Draft TALAB include the following:
- Amendments enabling the proposed introduction of an export tax on scrap metals
- Removal of the requirement to prove intent with regard to certain offences listed in the Fourth Schedule to the Income Tax Act, the Value-Added Tax Act and the Tax Administration Act
- Refusal to authorise a refund where returns are outstanding under the Skills Development Levies Act and the Unemployment Insurance Contributions Act
- Withholding of a refund pending a criminal investigation
- Estimated assessments where relevant material requested by SARS has not been supplied
We note with particular concern two of the proposed amendments:
- the proposed amendment to the TALAB to “Remove the requirement to prove intent with regard to certain offences listed in the Fourth Schedule to the Income Tax Act, the Value-Added Tax Act and the Tax Administration Act”.
- The proposals around limiting refunds being paid where returns are outstanding (UIF, SDL, Income Tax).
The reason we are concerned is because we have already seen how difficult it can be for taxpayers to get a refund. Now we are once again seeing legislation that will potentially make refunds harder. Further, it is of major concern that it is proposed the words “wilfully and” be removed from the Income Tax Administration Act. Previously it was up to SARS to show that the taxpayer had shown a wilfull intent before a criminal indictment could be followed. Now the onus falls on the taxpayer to show they had just cause for any error. It is conceivable that SARS could use this as a draconian tool to target individuals. One might even see a scenario where SARS institutes a criminal case in order to defer a large refund knowing the burden and cost will fall on the taxpayer to prove otherwise.
Rocky shoals ahead…