Bills tabled before Parliament
The Taxation Laws Amendment Bill and Tax Administration Laws Amendment Bill were tabled in Parliament on 27 October 2015. The Acts introduce the legislative amendments for the 2015 year based on the Budget Speech delivered in February 2015.
Following from our previous article on legal professional privilege, we note that the provisions of section 42A of the Tax Administration Act have been amended in the newly published bill. The words "during an inquiry or during the conduct of a search and seizure by SARS" have been inserted, which seems to imply that the time that a claim for legal professional privilege is limited to an inquiry or a search and seizure. If legal professional privilege is asserted at another time (outside the scope of an inquiry, search or seizure) it seems that the procedure in section 42A for claiming legal professional privilege may not be applicable. The meaning will still have to be tested.
Medium Term Budget Speech
It is of interest that in the Medium Term Budget Speech, it is indicated that there are two current topics of interest following the reports published by the Davis Tax Committee:
- Corporate income tax – There remain concerns about base erosion and profit shifting, in particular the misuse of transfer pricing. It is stated that initiatives are underway to deal with leakages in corporate income tax. Our article below highlights the global changes that are currently being implemented to combat tax avoidance.
- VAT – It is noted that an increase in the VAT rate remains one of the options available over the medium term to finance key elements of the National Development Plan.
In addition, the Medium Term Budget Speech states that the National Treasury will soon publish a draft carbon-tax bill for public comment. From this statement, it seems that the timeline for implementing the carbon tax may have to be extended.
Publications by the OECD
On 5 October 2015, the OECD released its final package for a coordinated international approach to combat tax avoidance by multinational enterprises under the Action Plan on Base Erosion and Profit Shifting. We can expect that South Africa will take cognisance of the content of these final reports in any future legislative amendments.