The National Treasury and the South African Revenue Service (SARS) have released the 2023 draft Rates and Monetary Amounts and Amendment of Revenue Laws Bill (2023 draft Rates Bill), the 2023 draft Taxation Laws Amendment Bill (2023 draft TLAB), the 2023 draft Tax Administration Laws Amendment Bill (2023 draft TALAB), and draft Regulations for public comment. These draft tax bills and regulations aim to give effect to the 2023 Budget tax proposals, as outlined in Chapter 4 and Annexure C of the 2023 Budget Review.
The public consultation process is an essential part of the tax legislative process, and interested parties are invited to provide their feedback on the proposed changes. The draft bills and regulations can be found on the National Treasury and SARS websites. Public comments can be submitted in writing to the National Treasury’s tax policy depository at 2023AnnexCProp@treasury.gov.za and SARS at firstname.lastname@example.org until the close of business on 31 August 2023.
The 2023 draft Rates Bill, which was initially published on Budget Day (22 February 2023), is now available for public information for the second time. It includes tax announcements from Chapter 4 of the 2023 Budget Review, focusing on changes to personal income tax tables, monetary thresholds for transfer duty, and increases in excise duties on alcohol and tobacco.
The 2023 draft TLAB contains legislative amendments required to implement more complex tax announcements from Chapter 4 and Annexure C of the 2023 Budget Review. These proposals involve complex policy and technical amendments and require greater consultation with stakeholders and the public. Key tax proposals in this bill include the rooftop solar tax incentive, renewable energy tax incentive, research and development tax incentive, urban development zone tax incentive, and various clarifications and refinements on tax treatment for different sectors.
The 2023 draft TALAB includes legislative amendments concerning tax administration, as announced in Chapter 4 and Annexure C of the 2023 Budget Review. Similar to the draft TLAB, these proposals require significant consultation with affected stakeholders and the public. Key tax proposals in this bill include the Advance Pricing Agreement Programme, employees’ tax registration requirements for non-resident employers, and measures to align with anti-money laundering and counter-terrorism developments.
The draft Regulations for Research and Development aim to align the wording of existing regulations with proposed changes to the Research and Development tax incentive, as outlined in the 2023 Budget Review. The regulations cover additional criteria for multisource pharmaceutical products and criteria for clinical trials in respect of deductions for research and development.
The draft Regulations on domestic reverse charge concerning valuable metal, and the draft Carbon Offset Regulations, introduce key tax proposals announced in Annexure C of the 2023 Budget Review. These regulations clarify definitions and responsibilities related to valuable metal transactions and carbon offset utilisation periods.
After the submission of written comments, National Treasury and SARS will engage stakeholders through public workshops to discuss the feedback received. The Standing Committee on Finance (SCoF) and the Select Committee on Finance (SeCoF) in Parliament will also make a similar call for public comment and convene public hearings on the draft tax bills before their formal introduction in Parliament.
The National Treasury and SARS will present a response document to the parliamentary committee meetings, incorporating the comments received during the public consultation process. Subsequently, the draft bills will be revised, taking into account public comments and recommendations, before they are formally introduced in Parliament for consideration. The draft tax amendments will be split into two types of bills: money bills (dealing with money bill issues) and ordinary bills (dealing with tax administration issues) for legal reasons.
The public’s engagement in the tax legislative process is crucial, and this consultation period allows stakeholders and the public to provide valuable insights, raise concerns, and suggest improvements to the proposed tax bills and regulations.