A summary of this committee meeting is not yet available.
FINANCE PORTFOLIO COMMITTEE
29 October 2002
REVENUE LAWS AMENDMENT BILL: PUBLIC HEARINGS
Chairperson: Ms B Hogan (ANC)
Price Waterhouse Coopers presentation
Price Waterhouse Coopers submission
South African Chamber of Business submission
South African Chamber of Business and Price Waterhouse Coopers presented their submissions on the Revenue Laws Amendment Bill.
Mr Butler and Mr Aitchison represented Price Waterhouse Coopers and gave a Powerpoint presentation on their lengthy submission. Mr Warren, representing SACOB, noted that they would not be presenting the submission orally but referred the Committee to the written document.
Ms Taljaard (DP) commented that PWC again raised the issue of transfer pricing and asked whether any consideration was going to be given to addressing the issue. She also raised concerns about policy consistency between departments, particularly looking at the Department of Home Affairs and the National Treasury. She said that when we look at what is being aimed at and what the new Immigration Act tries to achieve one wouldn't want to a situation where one area of policy and law is counteractive to another area. She directed the last question to the National Treasury.
Prof Keith Engel (National Treasury) answered that the issue of transfer pricing is basically should it apply to CFCs (controlled foreign companies). He told the committee that transfer pricing has to apply to CFCs because they are partially South African taxable entities.
Mr Grote (National Treasury) told the committee that there have not been any talks between SARS, National Treasury and Home Affairs. During talks Treasury had with the private sector, it became evident that their biggest concern is the cumbersome process to get work permits.
Ms Mahlangu (ANC) stated that the new legislation is meant to give more clarity to existing legislation and tries to close loopholes. She asked PWC if they are of the view that this is so.
Mr Aitchison (PWC) responded that they feel there is a great deal of enhanced clarity put forward in the Bill. There are a number of new reliefs, which they welcome. He added that this process (public submissions) of speaking to SARS and the National Treasury is very helpful. There remain a number of issues of concern. He added that overall the Bill is helpful to the taxpayer and must be welcomed.
Ms Joemat (ANC) asked SARS to expand on the term "cascading effect" which they had used in the original briefing.
Prof Engel answered that constant changes, as are being made in this Bill, creates an environment with a level of uncertainty. He felt that what needs to be done is to have a more formal process at the beginning before the budget. A formal process - where all the problems the taxpayers might have are put on the table - would be helpful. That would lead to rooting out all the problem areas once and for all at the beginning of the year. He added that this process of making changes throughout the year cannot go on forever and that it is necessary to settle on a set process. He reminded the committee that this is a major tax reform that has been going on for the last two years.