Tax

The captain of Ship SA, President Cyril Ramaphosa, can surely see the iceberg that we are heading for and one can almost hear the call go out for us to 'brace for impact'. The iceberg is an economy that is in crisis – an unemployment rate of 42% (using the expanded definition), GDP growth projections down by 7.8%, tax revenue projections at R304 billion less than originally budgeted for, a budget deficit of R709 billion for 2020/21, a current debt to GPD level of 81.8% and debt service costs (interest) currently amounting to 21c in every tax Rand collected.

The June Supplementary Budget had already made it clear that South Africa was in a dire financial state. So, from that perspective, Finance Minister Tito Mboweni’s Medium Term Budget Policy Statement (MTBPS) offered very little in the way of surprises.

The Medium Term Budget Policy Statement (MTBPS) 2020 was tabled to Parliament on 28 October 2020 by South African Finance Minister Tito Mboweni.

As South Africa prepares to hear Finance Minister Tito Mboweni’s medium-term budget speech this week, it is becoming increasingly clear that the country needs a new post-COVID-19 approach to the tobacco industry and the growing illicit tobacco sector.

This article is based on the Court case (330/2019) [2020] ZASCA 34 (03 April 2020). The taxpayer was engaged in the importation, manufacturing and distribution of alcoholic beverages. The taxpayer entered into an agreement with foreign brand owners for the advertising and promotion of their alcoholic products in South Africa.

The threat of the COVID-19 pandemic resulted in a national lockdown in South Africa that commenced on 27 March 2020. This has brought about a significant change whereby many employees are now being required to work from home. The question now arises as to whether these employees will be entitled to claim any home office expenses incurred during the period that they are required to work from home.

The frustration factor for taxpayers is on the rise during COVID-19, with it becoming noticeably more difficult to find fast and reliable solutions. In this environment, it is crucial to ensure you are tax compliant.

The COVID-19 pandemic and subsequent lockdown saw a number of measures implemented to provide financial relief to South African individuals as well as businesses. One such measure was the deferment of the Carbon Tax deadline from the end of July 2020 to the end of October 2020 for Phase 1 contributors.

The envisaged future relaxation of the prohibition on 'loop structures' will be accompanied by amended tax laws, but current proposals are likely to result in more tax on certain structures. National Treasury has proposed a number of amendments to tax legislation as a result of the potential future relaxation of the SA Reserve Bank's current prohibition on so-called 'loop structures'. 

Transfer pricing audits can be onerous, but taxpayers can achieve a more successful outcome by providing all information requested, anticipating areas of concern, and engaging openly with the South African Revenue Services (SARS).