January 15, 2020
January 31, 2020

As the 2020 tax year draws to a close, we reflect on some of the significant highlights (and lowlights) during the year.

Significant judgments

Our courts delivered several, precedent-setting judgements during 2019:

  • Africa Cash & Carry: In November, the Supreme Court of Appeal (SCA) dismissed the appeal by Africa Cash and Carry, in respect of a tax debt of more than R1 billion. The dispute arose from manipulated sales figures reported to SARS and included penalties of more than 200%. The case contained essential lessons and guidance on the imposition of understatement penalties.
  • BMW: SARS was successful, again in the SCA, in concluding that the fees expatriate employees pay to service providers in respect of tax compliance services constitute a fringe benefit for these employees, which is subject to pay-as-you-earn in South Africa.
  • Spur: In November, Spur successfully defended an appeal by SARS in the Western Cape high court, relating to the disallowance of expenditure incurred by the group in funding an employee share incentive scheme. It is not clear whether SARS will take the matter to the SCA. Arguably, one of the more interesting comments came from the minority judgement, where judge Salie-Hlophe commented, “Completion of the tax returns is on par with a statement under oath. The taxpayer effectively vouches that it contains the truth, the whole truth and nothing but the truth.”


The South African Institute of Tax Professional presented another successful Tax Indaba in Sandton in August, creating a discussion platform between tax professionals and SARS. In September, many South African delegates attended the International Fiscal Association’s conference in London, where the “taxation of space” was one of the very interesting (and future-orientated) topics. Practitioners and taxpayers alike are encouraged to support conferences as it creates the platform of discussion needed to drive change.

Changes to the Act

The yearly legislative cycle was disruptive towards the end when unexpected changes were contained in the Taxation Laws Amendment Bill relating to the “hybrid equity instrument” regime. The proposed amendments have been widely criticised, and it has been acknowledged in the Parliamentary Standing Committee of Finance that the amendment contains a technical error that needs to be corrected. It is expected that the Bill will be promulgated during the course of January 2020.

New Commissioner

Arguably, the most significant occurrence of the year was the appointment of Edward Kieswetter as the new permanent Commissioner at SARS. He had formerly served as the founding Group Executive of the SARS Large Business Centre and High Nett Worth Unit, SARS Chief Operating Officer and Deputy Commissioner during the period 2004 to 2009.

We look forward to the many positive changes that Mr Kieswetter aims to bring in the new year as South Africa faces a revenue shortfall.

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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