Appropriation Bill: Formal Consideration; Taxation Laws Amendment Bill: Deliberations

This premium content has been made freely available

Finance Standing Committee

12 March 2001
Share this page:

Meeting Summary

A summary of this committee meeting is not yet available.

Meeting report

FINANCE PORTFOLIO COMMITTEE

FINANCE PORTFOLIO COMMITTEE
13 March 2001
APPROPRIATION BILL: VOTING; TAXATION LAWS AMENDMENT BILL: DELIBERATIONS

Chairperson: Ms B Hogan

Relevant documents:
Portfolio Committee on Finance Report on the Appropriation Bill [B10-2001]
Taxation Laws Amendment Draft Bill [2 March 2001 version]

SUMMARY
The Committee Report on the Appropriation Bill hearings was adopted.

The Committee went through the latest version of the Taxation Laws Amendment Draft Bill checking the amendments that had been incorporated as a result of the public hearings. SARS pointed out that certain amendments are not yet reflected in the Bill, as discussions with stakeholders are still ongoing. The committee was concerned over the issue of valuations and a lengthy discussion ensued.

MINUTES
Report on Appropriation Bill
The Chairperson presented the draft committee report to the committee and asked members to comment on its contents as she proceeded through it. No major changes were made to the report. Certain technical changes were suggested by Mr K Andrew (DP) and the Chairperson.

The Chair emphasised the report does not reflect the views of the committee or its individual members. The report is a synopsis of what was suggested in the public hearings on the Bill.

Mr Andrew asked if the actual submissions made to the committee would be available and if a statement in this regard could be inserted in the Report. The Chair concurred.

The adoption of the Bill was delayed until the required quorum was present. The committee then adopted the report inclusive of the technical changes that had been suggested.

Taxation Laws Amendment Draft Bill
The Committee went through the new draft of Bill which reflected the amendments that had been proposed to it during the public hearings. SARS noted that there are some issues that remain unresolved because discussions with the relevant stakeholders are ongoing.

For the most part, questions were based on clarification of some of the clauses. However, a great deal of discussion once again ensued on the issue of valuations.

Discussion
The Chair asked SARS with which organisations they are still holding discussions.

Mr K Louw (SARS) stated that they would be meeting with representatives from the Life Officers Association (LOA). Issues that are still being discussed are: (i) The formula to be used to determine allowable deductions in the Industrial Policy Fund; (ii) Second hand policies; (iii) Intermediary funds. He added that there are smaller issues such as the cascading effect.

Mr Louw said SARS is also having discussions with Agri-SA on the issue of primary residences on farms. He noted that most of the comments that SARS had received during public hearings have been included in the current draft of the Bill.

Mr Andrew asked at what point is SARS going to dispute a valuation that has been made by a taxpayer. Mr M Booi (ANC) was concerned that placing valuations in the hands of taxpayers would open up loopholes for tax evasion.

Mr Louw was quick to point out that it would not be the first time that the onus would be placed on the taxpayer. The old Income Tax Act has many provisions that place the onus on the taxpayer. For example when a taxpayer claims an exemption the onus is on the taxpayer to show that he or she qualifies for it. SARS only has to check on whether the taxpayer indeed qualifies ie that the justification for the exemption is valid.
He conceded that SARS is in the process of building up its capacity to cope with the regulation of valuations.

Mr Booi was not sure how the man in the street was going to value a property without paying a professional to do it. He added that municipal valuations could also not be relied on, as municipalities do not perform them as regularly as they should.

Mr Louw stated that there should be no reason for concern as most of the valuations would in any event be acceptable. Only a small portion would have to be checked out.

Mr Andrew once again noted that valuations are problematic as huge discrepancies exist between municipal valuations and market valuations. He was concerned that SARS anticipates taxpayers relying on estate agents to make valuations. Is there not going to be a cost attached to valuations by an estate agent? Mr Andrew asked Mr K Durr (ACDP, Western Cape) to elaborate on the way estate agents operate, as he is knowledgeable about the industry.

Mr Durr stated it is common practice for estate agents to charge for valuations. He added that the cost could run into hundreds of rands.

Mr Booi said that he had the impression that the National Treasury is not ready to implement the Bill.

The Chair asked Mr Booi if he is suggesting that SARS take responsibility for valuations.

Mr Booi said that he was.

The Chair felt that it would not be viable for SARS to take responsibility for valuations but nevertheless insisted guidelines be set for valuations to be done.

Mr Durr suggested that the cost of valuations be made tax deductible.

Prof Keith Engel, Legal Advisor to the National Treasury, stated that valuation costs form part of the base cost.

The Chair asked SARS to provide the committee with a memo as to what would be regarded as acceptable valuations by them.

Mr Louw stated that SARS has tried to be as accommodating as possible. He added that matters could have been worse had they insisted on sworn valuations.

The Chair asked SARS to furnish the committee with the amendments they are to include in the Bill once they reach agreement on the issues they are currently discussing.

The Chair also announced that new submissions have been forwarded to the committee and that they would be considering them at their next meeting on 19 March 2001.

The meeting was adjourned.

Audio

No related

Documents

No related documents

Present

  • We don't have attendance info for this committee meeting
Share this page: