As the year draws to a close, we reflect on some of the significant highlights (and lowlights) of the 2018 tax year.
Davis Tax Committee concludes its work
The Davis Tax Committee (DTC) was appointed by the Minister of Finance in 2013, to inquire into the role of the tax system in the promotion of inclusive economic growth, employment creation, development and fiscal sustainability. The committee published several in-depth reports, including VAT, corporate income tax, capital gains and wealth taxes. Many of their recommendations will undoubtedly be considered in the years to come. On 27 March 2018, after five years, the DTC held its final meeting. All reports are available at http://www.taxcom.org.za/library.html.
Two important, precedent-setting judgements were delivered by our courts during 2018:
Changes to the Act
The yearly legislative cycle ended when the Taxation Laws Amendment Bill was published on 24 October 2018, ending a process that started with the Budget Speech in February. 94 organisations and individuals provided valuable inputs and comments on the draft bill, on issues ranging from venture capital companies to debt reduction. As always, the input from the public and organisations significantly shaped the amendments to the law.
In May, a commission into tax administration and governance at SARS was appointed under the leadership of Retired Justice Robert Nugent. Several concerning revelations have been made, which has led to the dismissal of Tom Moyane as Commissioner. A final report from the Commission is due shortly – which will hopefully set the scene for positive changes at SARS.
VAT increase and review
On the back of an increase in the VAT rate to 15% on 1 April 2018, a review was undertaken by a panel of experts on the zero-rating of several goods. It was finally decided that white bread flour, cake flour and sanitary pads will be zero-rated from 1 April 2019, at a revenue loss of R1.2 billion to the fiscus.
Sadly, two respected personalities in the tax fraternity passed away in 2018. Professors Matthew Lester and Lynette Olivier will be remembered for their valuable contributions to the field of tax over many years, both in academics and in commerce. Their works will continue to serve as authoritative sources for many years to come.
Undoubtedly, 2019 will bring as many, if not more exciting changes to the world of tax. It will be particularly interesting to see the political impact on our tax system, given that we are heading into an election year.
This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)