Budget and tax highlights for 2024/25
2024/25 Budget Review
Nexia SAB&T on 21/02/2024

2024/25 Budget Review

The Minister of Finance, Mr. Enoch Godongwana, tabled his budget review on 21st February 2024. While tax revenue performed well in 2021/22 and 2022/23 due to high commodity prices, revenue for 2023/24 is now expected to fall short by R56.1 billion. Government has proposed tax increases totalling R15 billion in 2024/25 to alleviate immediate fiscal pressures, while limiting the impact on economic growth. The following were the key tax proposals:

Draft National State Enterprises Bill
Nexia SAB&T on 10/10/2023

Draft National State Enterprises Bill

Finance Minister Pravin Gordhan has unveiled a sweeping plan to overhaul the governance and management of state-owned companies, which he said have been plagued by corruption, inefficiency and poor performance. The plan, which was announced in his medium-term budget policy statement on Wednesday, aims to restore the financial viability and strategic relevance of the entities, which collectively have more than R1 trillion in assets and employ over 300 000 people.

PAYE Monthly Payroll Submission to be automated by 2025
Nexia SAB&T on 10/10/2023

PAYE Monthly Payroll Submission to be automated by 2025

The SARS PIT/PAYE journey to end state is to replace the current employees’ tax, provisional tax and assessment filing seasons for employers and individuals by a modern, fully automated process of near real-time tax liability estimation, withholding and paying to SARS of the correct tax due. This will be underpinned by a taxpayer account that reflects taxable events and 3rd party data in real time (or close to real-time), in a manner that allows SARS to transition all their value chain activities (like verification & disputes) to real-time.

SARS Digitilisation of Tax Administration
Nexia SAB&T on 07/09/2023

SARS Digitilisation of Tax Administration

The South African Revenue Service (SARS) has embarked on a digital transformation journey to modernise and enhance its tax administration capabilities. The aim is to improve service delivery, compliance, efficiency and effectiveness, as well as to combat tax evasion and fraud. Some of the key initiatives that SARS has implemented or is planning to implement include:

Employer Interim Reconciliation starts on 18 September 2023
Nexia SAB&T on 07/09/2023

Employer Interim Reconciliation starts on 18 September 2023

Employer Interim Reconciliation is part of the Filing Season. This year, the Employer Interim Reconciliation for Employers filing season starts on 18 September 2023 until 31 October 2023. During this period, all employers in both private and public enterprises must reconcile their Monthly Employer Declarations (EMP201). These reconciliations are based on the Monthly Employer Declarations (EMP201) submitted with the tax values of the interim IRP5/IT3(a)s certificates generated, accurate payroll information and employees’ tax (PAYE) payments made during the period 1 March 2023 – 31 August 2023. Thereafter, employers can submit an Employer’s Reconciliation Declaration (EMP501) to SARS.

SARS Reporting Requirements For Trustees 2023
Nexia SAB&T on 08/08/2023

SARS Reporting Requirements For Trustees 2023

SARS has increased the reporting requirements for trustees of resident trusts. As from the 1 September 2023, trustees, as representative taxpayers for a trust, are required to submit an IT3(t) form to SARS electronically – relating to the trust for which he or she acts as trustee. The IT3(t) will be due on the 30th September of each year in which the trust’s tax year ends. Trustees will be required to supply information about all distributions made from the trust to beneficiaries or other persons (in respect of any amount vested in a beneficiary including income (net of expenditure), capital gains and capital amounts distributed by 30 September during the preceding tax year of assessment, which ended at the end of February of the same year. In addition to the information about distributions, demographic information about the trust and beneficiaries will also be required to be submitted.

Two Pot Retirement System
Nexia SAB&T on 03/07/2023

Two Pot Retirement System

The Ministry of Finance has published the draft legislation for the "two pot" retirement system for comment. The draft legislation aims to implement the reform of the pension system that was agreed upon by the government and social partners in 2020. The "two pot" system consists of a mandatory basic pension that covers the minimum subsistence level, and a voluntary supplementary pension that allows individuals to save more for their retirement. The draft legislation also introduces incentives for longer working lives, such as a gradual increase in the retirement age and a bonus for working beyond the statutory retirement age. The Ministry of Finance invites all interested parties to submit their comments and suggestions on the draft legislation by August 31, 2023.

New rules for resolving tax disputes with SARS
Nexia SAB&T on 03/07/2023

New rules for resolving tax disputes with SARS

Taxpayers who have a dispute with the South African Revenue Service (SARS) can now benefit from new rules that aim to simplify and expedite the resolution process. The new rules, which came into effect on 1 July 2023, replace the previous dispute resolution rules that were in place since 2003.

New Chief Director of Tax Policy at the Ministry of Finance
Nexia SAB&T on 03/07/2023

New Chief Director of Tax Policy at the Ministry of Finance

Ms Yanga Mputa has been appointed as the new Chief Director of Tax Policy at the Ministry of Finance. Ms Mputa has a wealth of experience in tax administration and policy, having served as a senior manager at the South African Revenue Service (SARS) and as a tax consultant at PwC. She holds a Master of Commerce degree in Taxation from the University of Cape Town and a Bachelor of Accounting Science degree from the University of South Africa.

Financial Stability –Extract from the Reserve Bank Review
Nexia SAB&T on 06/06/2023

Financial Stability –Extract from the Reserve Bank Review

In South Africa, idiosyncratic factors continued to weigh on domestic financial sector resilience and overall economic growth prospects. The most notable country-specific vulnerability is the increasingly detrimental and widespread ramifications of an insufficient and unreliable electricity supply, while concerns over the deteriorating South African rail and port infrastructure networks also continue to grow.

 CIPC - Beneficial Owner Filing Requirements
Nexia SAB&T on 06/06/2023

CIPC - Beneficial Owner Filing Requirements

Filing of Beneficial Owner information is required by the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act 22 of 2022. The Act amended the Companies Act and gave the Commission (CIPC) a mandate to request companies to file and update Beneficial Owner information. The Minister of Trade, Industry and Competition together with the Companies and Intellectual Property Commission (CIPC) have published Companies Amendment Regulations under Government Notice 48648 on the 24th of May 2023.

Tax Implications on the leasing of property
Nexia SAB&T on 05/05/2023

Tax Implications on the leasing of property

The tax implications for the leasing of property can be complex. For your information, we set out the basic TAX implications for the leasing of property.

Tax Chronology Of South Africa: 1979–2023
Nexia SAB&T on 17/04/2023

Tax Chronology Of South Africa: 1979–2023

The reserve bank has published an overview of the current and historical rates for various taxes, duties and levies collected by the South African Revenue Service (SARS). For the most important types of taxes, the coverage dates back to 1979, but for the less important ones, only a more recent subset is covered. It makes for interesting reading so we have summarised some of the key taxes over the years. The full publication is available here.

Reserve Bank Monetary Policy
Nexia SAB&T on 17/04/2023

Reserve Bank Monetary Policy

In March the Monetary Policy Committee decided to increase the repurchase rate by 50 basis points to 7.75% per year, with effect from the 31st of March 2023. Three members of the Committee preferred the announced increase. Two members preferred a 25 basis points increase.

EMPLOYER ANNUAL DECLARATIONS (EMP501):  Due 31 MAY 2023
Nexia SAB&T on 17/04/2023

EMPLOYER ANNUAL DECLARATIONS (EMP501): Due 31 MAY 2023

Employers are required to submit their annual reconciliation declarations (EMP501) that reflect accurate and the latest payroll information about their employees, monthly employer declarations (EMP201) for PAYE, UIF and SDL; payments made (excluding penalties and interest paid); and employee tax certificates (IRP5/IT3(a)s generated, covering the full tax year from 1 March 2022 to 28 February 2023.

Two-pot retirement system
Nexia SAB&T on 06/03/2023

Two-pot retirement system

The first phase of legislative amendments to the retirement system is due to take effect on 1 March 2024. The intent of these amendments is to enable pre-retirement access to a portion of one’s retirement assets, while preserving the remainder for retirement. Retirement fund contributions will remain deductible up to R350 000 per year or 27.5 percent of taxable income per year – whichever is lower. Permissible withdrawals from funds accrued before 1 March 2024 will be taxed according to the lump sum tables. Withdrawals from the “savings pot” before retirement will be taxed at marginal rates. On retirement, any remaining amounts in the savings pot will be taxed according to the retirement lump sum table (for example, R550 000 is a tax-free lump sum on retirement).

Rooftop solar tax incentive
Nexia SAB&T on 06/03/2023

Rooftop solar tax incentive

To increase electricity generation, government is also proposing a rooftop solar incentive for individuals to invest in solar PV. Individuals will be able to receive a tax rebate to the value of 25 per cent of the cost of any new and unused solar PV panels. To qualify, the solar panels must be purchased and installed at a private residence, and a certificate of compliance for the installation must be issued from 1 March 2023 to 29 February 2024.

Expansion of the renewable energy tax incentive
Nexia SAB&T on 06/03/2023

Expansion of the renewable energy tax incentive

The tax incentive available for businesses to promote renewable energy will be temporarily expanded to encourage rapid private investment to alleviate the energy crisis. The current incentive allows businesses to deduct the costs of qualifying investments over a one- or three-year period, which creates a cash flow benefit in the early years of a project. Businesses are able to deduct 50 percent of the costs in the first year, 30 percent in the second and 20 percent in the third for qualifying investments in wind, concentrated solar, hydropower below 30 megawatts (MW), biomass and photovoltaic (PV) projects above 1 MW. Investors in PV projects below 1 MW are able to deduct 100 percent of the cost in the first year.

Estate Duty
Nexia SAB&T on 06/03/2023

Estate Duty

When a natural person (taxpayer) dies, that person is called a ‘deceased person’ and all his or her assets on date of death will be placed in an estate. This estate is called an estate of a deceased person (commonly known as a ‘deceased estate’). Assets in a deceased estate can amongst other things include immovable property (house), movable property (car, furniture, etc), cash in the bank, etc. The person who administers a deceased estate is called an ‘Executor’. Once the Executor has finalised all the administration in the deceased estate, the remaining assets (after paying all the debts) will be distributed to the beneficiaries.

CIPC Rollback to old e-services and BizPortal
Nexia SAB&T on 06/02/2023

CIPC Rollback to old e-services and BizPortal

CIPC launched new e-services platforms in early January 2023. Given some major technical issues a decision was taken to rollback to the old CIPC e-services and BizPortal.

2023 SARB Economic outlook (MPC extract)
Nexia SAB&T on 06/02/2023

2023 SARB Economic outlook (MPC extract)

As this year commences, high inflation and weak economic growth continue to shape global conditions. Russia’s war in the Ukraine drags on and recession risks remain elevated in the Euro Area, even though energy constraints have eased. Growth prospects for the United States this year are lower. The growth outlook for China has improved but is likely to remain modest by historical standards. In the developing world, a number of economies face debt distress, exacerbated by tighter global financial conditions.