Penalties for failing to register as a taxpayer as well as for other transgressions, such as not completing tax forms and avoiding paying transfer taxes on property, are to be dramatically increased. Full details of the penalties are still to be published.
And the South African Revenue Service (SARS) is ensuring that it will catch errant taxpayers by, among other things, strengthening its criminal investigation capacity in co-operation with the Department of Justice, the National Prosecution Authority and the South African Police Service.
- Stamp Duty on insurance policies and fixed deposit receipts
is to be eliminated with effect from April 1.
- Investors in derivative instruments
, particularly hedge funds, should take care. A joint committee of SARS and the National Treasury is looking at the taxation of derivative instruments. In the Budget Review mention is also made of the fact that tax changes are being contemplated to deal with new products and investment structures that will come into place in terms of the Collective Investment Schemes Control Act.
- You may soon find another type of debt collector knocking on your door if you do not pay your dues to SARS. The Receiver of Revenue intends increasing its collection capability
by handing over collections to private agencies.
- Individuals who invest in what are called "secondary trades"
and who generate tax losses to write off against other taxable income, are to be stopped in their tracks. These secondary trades include such activities as farming, letting holiday accommodation, as well as hobby-like activities such as yachting and collecting cars. The government is proposing that losses from secondary trades be ring-fenced. In other words, you will no longer be able to write off the losses against other income, but only against any potential future losses from the specific secondary activity.
- The ad valorem excise duty on computer equipment
is to be abolished to encourage the competitiveness of South Africa's business enterprises. If families can afford a computer at home, children ultimately benefit because the computer can be used as a learning tool. Abolishing ad valorem excise duty on computers will also make it cheaper for businesses to upgrade their computer systems.
- The price of plastic bags
is likely to increase because a levy on the bags is to be instituted following an agreement from the Minister of Environmental Affairs and Tourism to reverse regulations banning the manufacture and use of certain types of plastic bags. Part of the levy will be earmarked for the recycling of plastic bags.
- Air passenger departure taxes
are to be increased by 10 percent. This means that the tax will increase by R5 to R55 per passenger departing to Botswana, Lesotho, Namibia and Swaziland, and by R10 to R110 per passenger departing for all other international destinations.
- Employers
who do not pay over PAYE and Unemployment Insurance Fund levies to SARS, and VAT vendors who do not pay over taxes collected from you, are in for the high jump. People responsible for the collection and payment of these taxes will now become personally liable if the money is not paid over to SARS.
- People who liquidate companies after first looting the assets
will not find it so easy in future. SARS is to acquire powers that will enable it to make a claim against shareholders of liquidated companies in their personal capacity.
- If you think your tax adviser has come up with a really smart idea to avoid tax, the taxman is proposing to establish a system whereby you can first check with SARS whether or not the proposal is acceptable, rather than face being caught out later and forced to pay tax penalties. SARS is reviewing the possibility of introducing a formal advance rulings process
.
- SARS will be issuing new simplified tax returns
for individuals this year to make it easier to meet tax deadlines.