TEST YOUR KNOWLEDGE ON CYBERSECURITYMay 7, 2021
IS A VOUCHER STILL THE PERFECT GIFT?June 4, 2021
With the Budget Address by Finance Minister Tito Mboweni having passed, it is useful to consider how the proposed tax amendments raised during the Budget Speech eventually become law. As a starting point, it is important to remember that the South African Revenue Service (SARS) does not make tax law. In South Africa, Parliament is responsible for the law-making process and promulgation of acts by the President. Of course, SARS has a role to play in the legislative process since they are ultimately the tax law administrators. Still, the prerogative and responsibility of those laws remain that of Parliament.
Over the last several years, the annual tax legislative amendment cycle takes approximately ten months – this is rather frustrating for taxpayers as it essentially only provides two months’ worth of transactional certainty before the next amendment cycle starts. Not all those tax amendments are delivered as part of the Minister’s Budget Speech – the more detailed tax amendments are included in Annexure C to the budget. This document outlines the board issue/problem faced by the fiscus and usually indicates that an amendment of some sort can be expected, in respect of that particular matter.
At this stage, taxpayers merely expect that provisions of the Act might be amended. During June/July, following the Budget Speech, the draft taxation amendment bill and draft explanatory memorandum on that bill is released by National Treasury. Thereafter, the public is afforded approximately four to six weeks to make representations to National Treasury, providing their inputs and commentary on the proposed amendments. A series of workshops are held in Parliament to address the draft amendments, as well as the public comment that has been received. These consultations are followed by a discussion document where the outcomes and suggestions from the public are either incorporated in the draft bill, or reasons are provided for not accepting the inputs of the public.
The aforementioned process plays out over several months, and the “final” bills are usually released toward the end of November or early in December of a particular calendar year. This does not mean that the amendments are law yet – the amendments only become law once the President has promulgated the bill which, lately, has occurred late in January the following year – only about four to six weeks before the next Budget Speech – at which stage we would have come full circle.
Because the process is so inclusive and participation from the public and practitioners alike are necessary, one understands the lengthy process. That notwithstanding, the short window of transactional certainty is a stumbling block in activity.
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)