Saiba informs accountants on tax matters

The South African Institute for Business Accountants (Saiba) held a well-attended Tax Budget and Tax Update Seminar at Bolivia Lodge on Thursday.
The seminar was attended by accountants, bookkeepers and financial directors in private practice, commerce, academia and the government sector and the presenter was Piet Nel, a highly sought after and very popular authority on tax matters.
Nel said that there was a lot of interest in the 2016 budget presented by Pravin Gord-han, Minister of Finance and that all anticipated some surprises.
“In the end the budget didn’t bring big surprises and the Minister didn’t increase taxes, other than the fuel levy and the sin taxes. The revenue for this fiscal year will basically come from inflation, in other words the Minister didn’t adjust for fiscal drag. Some new taxes will be introduced, but they are taxes that, apart from bringing in some revenue, are mainly used to drive behaviour – such as the sugar tax, the tax on CO2 emissions and other environmentally related taxes,” Nel informed.
According to Nel, Gordhan made three significant announcements. “The first is the increase in the inclusion rate of capital gains and consequently in the effective rate of tax that is levied on a taxable capital gain. The inclusion rate for individuals went up from 33,3% to 40% and for other taxpayers, such as companies and trusts, from 66,6% to 80%. The second important one relates to the taxation of trusts and the parties to a trust. The Minister stated that to limit taxpayers’ ability to transfer wealth without being taxed, government proposes to ensure that the assets transferred through a loan to a trust are included in the estate of the founder at death, and to categorise interest-free loans to trusts as donations and added that government will consider further measures to limit the use of discretionary trusts for income-splitting.
Nel advised that taxpayers and advisers wait for the draft amendment bills for more clarity, but said that it has made giving tax advice in this regard extremely uncertain.

“The last significant announcement relates to another tax amnesty. With a new global standard for the automatic exchange of financial information between tax authorities coming into effect from 2017, and it also applies to South Africa, I agree with the Minister that time is running out for taxpayers who still have undisclosed assets abroad. These taxpayers will unfortunately have to wait until 1 October 2016 as applications for the tax amnesty can only be made from that date onwards,” Nel concuded.
Sally Hansen, organiser of the event, said that accountants face considerable challenges, not only to keep up to date with countless various legislative requirements but in particular with SARS and tax affairs. “Having a presenter of the high calibre of Piet Nel explaining the various aspects of the changes in the Tax Act and the Budget was such a boost for all accountants,” Hansen commented.

Photos: Barry Viljoen – Len Vorholt, Chairperson of the Limpopo branch of the South African Institute for Business Accountants (saiba), Sally Hansen seminar organiser and Piet Nel, authority on tax matters.

BARRY VILJOEN
>>barryv.observer@gmail.com