On 22 May 2019, the President assented to the Carbon Tax Act, 15 of 2019 (Carbon Tax Act), effective from 1 June 2019. The Carbon Tax Act has been implemented as part of South Africa's commitments under the Paris Agreement as a means to reduce greenhouse gas emissions and the challenges of climate change.
In light of the recent announcement that the tax return threshold will be lifted from R350,000 to R500,000, it is crucial for South Africans to fully educate themselves on their filing obligations, or risk incurring possible fines by the South African Revenue service (SARS).
The Carbon Tax Act 15 of 2019 (Carbon Tax Act), the Customs and Excise Act 91 of 1964 (Customs Act) and the Customs and Excise Amendment Act 13 of 2019 (Customs Amendment Act) pose numerous uncertainties on the road to implementation of carbon tax. We have mapped out below a pathway to assist taxpayers in navigating the complex statutes regulating carbon tax.
The levy income of a body corporate, share block or an association of persons, such as a home owners association ('residential estate'), is exempt from income tax by virtue of section 10(1)(e) of the Income Tax Act.However, not all income received by a residential estate is exempt from tax, only levy income. SARS recently published a new Interpretation Note 64 on the levy exemption.
The tax implications of running a business are not widely taught in the South African education system. This is why many entrepreneurs are not well equipped to deal with the taxation side of their businesses in an informed manner.
For those who have been subjected to a SARS audit, it may be hard to imagine a reality where this experience can be any more agonising. If this resonates with you, perhaps consider a world where SARS makes you pay for the resources it had to expend in putting you through this ordeal. The truth is, it can.