Budget Finance Public Sector Taxation

Budget 2013/14, Consolidated Commentary

Budget 2013 Infographic

The Deloitte Budget 2013/14 infographic represents themes that were highlighted in the 2013/14 Budget Speech. click here to download the full Consolidated Commentary Guide, or read the summary below:

Exchange Control

The Minister of Finance made some significant announcements on these issues in his 2013/14 speech, including proposed measures to relax cross-border regulations on companies, banks and other financial institutions to invest and operate in other countries.key exchange control issues, the ‘Gateway to Africa’ reforms.

Personal Income Tax

Individuals will enjoy Personal Income Tax relief amounting to R7 billion by way of adjustments to the Personal Income Tax brackets, tax rebates and medical fees tax credit (see tax tables in Deloitte Quick Tax Guide – 2013/14).

Grants and Incentives

The objective of this year’s Budget remains the focus on transformation of the economy and promoting industrial development, investment, competitiveness and employment creation. In the past specific incentives were created to provide assistance to industries to reach our medium terms goals. The announcement of a Carbon Tax in this year’s Budget Speech makes it less clear on how government aims to promote industrial development and the overall competitiveness of the South African economy.

Carbon Tax and Energy

The announcement of a Carbon Tax in this year’s budget speech makes it less clear on how government aims to promote industrial development and the overall competitiveness of the South African economy. The effect of the introduction of Carbon Tax will, in our opinion, be severe and, although only to be introduced from 2015, companies will have to start considering Carbon Tax seriously in their budgeting processes.

International Tax

  • Further easing of cross-border anomalies
  • Gateway subsidiary for treasury purposes
  • Streamlining currency taxation
  • Reforming the taxation of trusts
  • Deferral of expenditure incurred by certain connected persons
  • Controlled foreign company activities
  • Removal of source focus for initial copyright authors
  • Uniform cross-border withholding to prevent base erosion

Company Tax

  • Relief for small businesses corporations and social-impact firms
  • Restrictions on the deductibility of debt
  • General interest cap on connected party debt
  • Interest cap on corporate acquisitions and restructures
  • Share cross-issues to be revised
  • Proposals applicable to financial institutions

Customs Duties and Excise Duties

  • Specific Excise Duties (“sin taxes”)
  • Fuel Taxes
  • Advalorem Excise Duties
  • General Customs and Excise matters

Value-Added Tax (VAT)

  • VAT registration of foreign businesses
  • Streamlining registration and filing for businesses and individuals
  • Miscellaneous amendments
    • Motor cars
    • Repossession of goods
    • Future supply of services
    • In-flight entertainment
    • Supplies between connected persons
    • Tax invoices issued in foreign currency
    • Temporary letting of residential fixed property
    • Conversion of share block scheme to a sectional title
    • Home-owners association
    • The right of use of fixed property
    • Indirect exports
    • Imported goods – damaged or destroyed
    • Pooling arrangements
    • Square Kilometre Array
    • Research projects to be undertaken by National Treasury in respect of VAT

Administrative Issues and Other Taxes

  • Aggressive tax planning, base erosion and profit shifting
  • Taxation of Trusts
  • Understatement penalties
  • Streamlining registration and filing
  • Tenders and tax compliance
  • Gambling tax
  • Tax policy research projects

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