Good news was announced with regard to the removal or amendment of a very burdensome provision.
In 2013, paragraph 11(2)(b) of the Eighth Schedule was amended to introduce a highly unusual and extremely controversial provision. This applies to any South African company that acquires foreign shares and pays for those foreign shares in whole or in part through an issue of its own shares. The issue of the South Africa shares is treated as a disposal for CGT purposes and the transaction immediately triggers a CGT event. While it can be assumed, based on comments made in the relevant Explanatory Memorandum, that Treasury's intention was to target cross issues of shares in situations where control of a South Africa company shifts abroad as a result of a majority of its shares being held by or issued to non-South Africa residents in exchange for new foreign shares issued to the South Africa company, the relevant legislation is drafted much more broadly than this and catches within its scope any transaction in which any South Africa company issues any shares in exchange for either new or existing foreign shares.
Fortunately, it seems that Treasury has accepted that that this provision severely restricts the flexibility of South Africa companies to enter into normal commercial transactions involving acquisitions of shares in foreign companies and that there is no clear policy justification for this. The Budget commentary indicates that the wording of the relevant provision will be revisited and relaxed.