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2024 Legal and Policy

Legal and Policy - 31 October 2024

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Legal and Policy - 31 October 2024

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SARS

  • 24 October 2024 – Income Tax Act, 1962
  • BPR 412 – Tax consequences of the issue of a long-term loan for the issuer and holder
  • 24 October 2024 – Customs and Excise Act, 1964: The tariff amendments notice, scheduled for publication in the Government Gazette, relates to the amendments to –
  • Part 1 of Schedule No. 1, by the substitution of tariff subheadings 1001.91 and 1001.99 as well as 1101.00.10, 1101.00.20, 1101.00.30 and 1101.00.90, to increase the rate of customs duty on wheat and wheaten flour from free of duty to 42,20c/kg and 63,29c/kg respectively, in terms of the existing variable tariff formula (ITAC Minute M07/2024).

Publication details will be made available later

  • 25 October 2024 – Since the implementation of the Two-Pot Retirement System on 1 September 2024, SARS has noted the challenges that the industry has been experiencing. As such, another enhancement has been incorporated into IBIR-006 Tax Directives Interim Interface Specification Version 6.708. The enhancement and change inter alia will address additional validations for the de minimis (minimum amount that can be taken as cash) rule.

Currently, if a taxpayer has more than one policy with the same retirement annuity fund, to calculate the de minimis, the SARS system uses the value on the total gross benefit on the retirement amount but ignores any total benefit amounts from previous directives against the Financial Sector Conduct Authority number, registration number/approved fund number, for accruals from 1 October 2007.

To calculate de minimis, all corresponding component values in previous directives (accruals from 1 October 2007) against the same FSCA registration number/approved fund number, in respect of Form A&D, must be considered.

This has been corrected on Retirement Annuity Funds on Form C. The additional validations will apply to Form A&D for retirement or retirement due to ill health from a pension fund, provident fund or pension preservation fund.

  • 25 October 2024 – Customs and Excise Act, 1964: Publication details for tariff amendments notice R5475, as published in Government Gazette 51432 of 25 October 2024, are now available.
  • 28 October 2024 – The state provides state warehouses for the safekeeping of goods. These are managed by Customs. The purpose of this list of unentered goods is to notify the importer, exporter and any other person that has interest in the goods that the goods have been taken up into the State warehouse and if they remain unentered they will be disposed in accordance with the provisions of the Customs & Excise Act.

See the latest Customs Weekly List of Unentered Goods here.

  • 28 October 2024 – The Kariega branch office that was closed due to flooding is open from today, 28 October 2024. SARS wishes to apologise for any inconvenience that was experienced by taxpayers and traders because of closure of the office.
  • 30 October 2024 – Calculation of national currencies for the trade agreements:
  • 30 October 2024 – The South African Revenue Service (SARS) welcomes the Medium-Term Budget Policy Statement (MTBPS) tabled in Parliament today by the Minister of Finance, Mr Enoch Godongwana. The Minister revised the 2024 February Budget net tax revenue estimate from R1 863.0 billion to R1 840.8 billion.

As of 30 September 2024, SARS collected gross revenue of R1 070.4 billion yielding a net revenue of R846.2 billion and R224.3 billion in refund payments. The revenue performance was bolstered by stronger collections from CIT Provisional tax and lower-than-expected VAT and PIT refund payments. This was offset by lower-than-expected collections from Customs taxes, PAYE, and the General Fuel Levy. The areas that were adjusted downward are:

  • Lower-than-expected previous year salary adjustments reducing the nominal wage bill estimate from Budget 2024 of 8.4% to MTBPS 2024 of 5.5%.
  • Slower growth on capital projects across general government, public corporations and private sector with Gross capital formation anticipated to decline from Budget 2024 of 9.5% to 5.2%.
  • Downward revision in outlook of nominal Exports from 5.2% to MTBPS 2024 of 3.5% as well as nominal Imports from 6.0% to 3.8%.
  • At Budget 2024 we assumed a 13.8% growth in PAYE based on the 8.4% growth in wage bill. PAYE collections for year-to-date September 2024/25 amount to R340.0bn, lower than the PE by R12.0bn (3.4%) and higher than previous year by R30.8bn (10.0%).

The deficit in revenue collections was partially offset by strong collections in CIT provisional tax collections collected R150.2 billion against an expectation of R141.4 billion yielding a surplus of R8.8 billion, up by 2.7% or R3.9 billion from previous year.

  • Fuel levy: A year-on-year contraction in fuel consumption has been a major issue for this financial year. A substantial amount of 1 333 million litres less fuel was used, which can be attributed to various factors such as the lower levels of loadshedding, and a shift towards alternative energy sources. The reduction in fuel consumption directly impacted the Net Fuel Levy. This has seen a year-on-year contraction of 3.9% resulting in a shortfall of R7.2bn.
  • Trade Taxes: Imports were expected to grow by 1.9%. However, year to date imports have declined by 5.1%. The total trade flows have declined also by R39.2bn (-2.0%) compared to the corresponding period last year. The overall decline in imports is due to low import flows of electrical machinery and vehicles.
  • Provisional CIT collections of R150.2bn, recorded a surplus of R8.8 billion (6.2%) and year-on-year growth of R3.9 billion (2.7%), mainly due to the Finance, Electricity and Manufacturing sectors. Collections grew above the required Budget 2024 rate of -3.3%. However, the Mining sector continues to encounter significant challenges primarily due to volatile commodity prices affecting Platinum Group Metals, Coal, and Iron Ore. The price fluctuations affect the profitability of companies resulting in downward pressure on CIT provisional payments. The sector has also been facing ongoing issues with transport, logistics, and border crossings, causing delays and increased export costs.
  • Despite having finalised ± 1.3 million more debt cases, which is almost 290% more than the previous year, our debt compliance efforts have yielded lower returns year on year by R9.3 billion, which equals to a 23.6% year-on-year contraction. SARS recorded significant increases year on year on deferred payment arrangements for debt, requests for suspension of payments and issuing final demands. This evidence the degree of hardship felt by taxpayers, which is negatively affecting their ability to honour their tax obligations.

The SARS Strategic Intent will continue to focus on Voluntary Compliance, ensuring that taxpayers and traders have clarity and certainty regarding their obligations, along with the necessary tools to facilitate easy and straightforward compliance. Conversely, SARS will impose significant legal and administrative costs on taxpayers and traders who deliberately fail to meet their obligations

Compliance efforts continue to yield success in dealing with non-compliance in particular segments and tax products. To date, compliance revenue secured R110.1 billion, reflecting a growth of R8.1 billion (8.0%). SARS will continue to intensify its efforts to maintain visibility and reinforce compliance, with plans to invest further on compliance initiatives to close the tax gap by targeting various taxpayer segments.

SARS Commissioner Mr Edward Kieswetter said that “In pursuing the attainment of the 2024/25 tax revenue estimate of R1 840.8 billion, SARS will be unrelenting in its drive to engender voluntary compliance. Critically in this pursuit, is to ensure that intermediaries charged by law to collect taxes on behalf of SARS pay it over. Importantly, SARS is ready to act against those who willfully and defiantly ignore their legal obligations by misrepresenting their true economic status. Those who enable this conduct are equally culpable. Taxpayers who abdicate their legal obligations place a disproportionate burden on honest taxpayers. Taxes play a critical role in cushioning the most vulnerable and destitute in our society. In this respect, voluntary compliance is sacrosanct.”

He continued: “SARS will continue to intensify and deepen its existing administrative efforts. We will continue to use sophisticated data science and artificial intelligence, to maintain the balance between service to taxpayers/traders, whilst managing risks to the fiscus by detecting dishonest taxpayers.”

“SARS will deploy more data science and artificial intelligence (AI) to step up its focus on the following areas of compliance risk:

  • Broadening the tax base via third-party data sources: Leveraging data from both formal and informal sectors to widen the tax base.
  • Work to register all taxpayers and traders, through predictive modelling, who ought to be on the register and ensure that they honestly file their declarations and pay their dues where necessary.
  • Build its detection capability using machine learning models and Artificial Intelligence (AI) to significantly improve service and offer a seamless service to honest taxpayers. This will also be used to detect dishonest taxpayers, improve debt collection while expanding the tax base and deal with tax avoidance.
  • Enforcing trade laws against the illicit economy (Customs and Excise): Strengthening tools to detect and prevent illicit activities, including those related to tobacco, fuel, and illicit financial flows.
  • Focusing on dispute prevention and resolution: Prioritizing products and strategies that prevent disputes that can be resolved.”

SARS is the nation’s treasure; a well-functioning tax and customs administration is a cornerstone to our vibrant democracy and should never be taken for granted. SARS seeks to ensure revenue sustainability by securing appropriate investment in SARS, and funding certainty. From a human capital perspective, SARS will continue to attract, develop and sustain a workforce that is future ready. We will be building the leadership bench strength of SARS and protect the autonomy of the institution.

Despite the tough operating environment, SARS expects that the start of a cycle of interest rate cuts will spur consumption expenditure. This expansion is expected to drive economic growth and widen the tax base, resulting in buoyant corporate tax, and VAT revenues. Additionally, the introduction of the “Two-Pot” system is expected to increase the tax base in the short to medium term. The 12 821 SARS staff, to whom we express sincere appreciation, will continue to work diligently in achieving the revised revenue estimate as presented by the Minister of Finance.

For further information, please contact SARS at SARSMedia@sars.gov.za.

  • 30 October 2024 – National Legislation: The Minister of Finance introduced the following bills in the National Assembly:
  • Rates and Monetary Amounts and Amendment of Revenue Laws Bill [B15—2024]
  • Taxation Laws Amendment Bill [B16—2024]
  • Tax Administration Laws Amendment Bill [B17—2024]
  • Revenue Laws Amendment Bill [B18—2024]
  • Global Minimum Tax Bill [B20—2024]
  • Global Minimum Tax Administration Bill [B21—2024]
  • 30 October 2024 – Achieving our Vision 2024 of a smart, modern SARS with unquestionable integrity that is trusted and admired is of paramount importance. Pivotal to the delivery of our vision are our digital platforms and technology infrastructure. To provide clarity and certainty, make it easy for taxpayers and traders to comply with their obligations and building public trust and confidence, our technology assets must demonstrate the highest levels of availability, robustness and security.

In accordance with our Vision and Strategic Objectives, which include modernising our systems to provide Digital and Streamlined online services, we are hard at work ensuring that our digital platforms and technology infrastructure are available, robust and secure, by performing regular upgrades, enhancements and maintenance.

Considering the above, SARS Digital platform maintenance are scheduled for:

Friday, 01 November 2024 from 18h00 to 22h00,

Saturday, 02 November 2024 from 22h00 to 05h00 Sunday, 03 November 2024.

During this time, you may experience intermittent service interruption on our eFiling, Tax and Customs Digital Platforms.

Responses (CUSRES messages) to transactions submitted during this time will be delayed, however, arrival and exit management functions are available at land border posts for all released declarations and manifests.

Stakeholders are therefore urged to submit all Goods Declarations (bills of entry) and Road Manifest, especially those deemed priority, by Friday, 01 November 2024 @ 17h00.

NATIONAL TREASURY

OECD

AuthorLegal and Policy
DivisionTax
Categories
Legal and Policy
Date31 October 2024