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FINANCE PORTFOLIO COMMITTEE
9 November 2007
REVENUE LAWS AMENDMENT BILLS; SECURITIES TRANSFER TAX BILLS: TREASURY RESPONSE TO SUBMISSIONS & ADOPTION
Chairperson: Mr N Nene (ANC)
Documents handed out:
Securities Transfer Tax Bill [B 44-2007]
Securities Transfer Tax Administration Bill [B 45-2007]
Revenue Laws Amendment Bill [B 42-2007]
Revenue Laws Second Amendment Bill [B 43-2007]
SARS / National Treasury response: Revenue Laws Amendment Bills & Securities Transfer Tax Bills
Committee Report on the Medium Term Budget Policy Statement (MTBPS)
Committee Report on the National Treasury Annual Report
Committee Report on the Financial Services Board Annual Report
Committee Report on the South African Revenue Services Annual Report
Committee Report on the Statistics South Africa Annual Report
[Available at once published]
SARS and National Treasury provided a response document to the sixty submissions they received on the Revenue Laws Amendment Bills & Securities Transfer Tax Bills. SARS explained some changes made to the final version of the Revenue Laws Amendment Bill as introduced. Questions from the Committee focused on whether provisions in the Bill would be counterproductive for improving investment and pension payouts.
The Committee then adopted the Revenue Laws Amendment Bill, the Revenue Laws Second Amendment Bill, the Securities Transfer Tax Bill and the Securities Transfer Tax Administration Bill.
The Committee adopted its Committee Report on the Medium Term Budget Policy Statement (MTBPS). The Committee Reports on the Annual Reports of National Treasury, Statistics South Africa, the Financial Services Board and the South African Revenue Service were also adopted with amendments.
Adjustments Appropriation Bill
Mr Nene said that he and Mr K Moloto (ANC) had raised their dissatisfaction with the information provided by Correctional Services about its roll-over in the Adjustments Appropriation Bill to both the Ministers of Finance and Correctional Services. The Commissioner for Correctional Services had responded with a letter to the Committee which Mr Nene read out. The Commissioner retracted the impression that was created that the amount of R 512 million, which was to be rolled over, would not be spent.
SARS / National Treasury response: Revenue Laws Amd Bills & Securities Transfer Tax Bills
Mr Franz Tomasek (Assistant General Manager: Legislation - SARS) focused on the anti avoidance rule with respect to intellectual property. Treasury were seeking to disallow a portion of a proposed deduction depending on circumstances. Further review indicated that there could be other concerns and the effective date had now been delayed to 1 January 2009. Problematic cases could be brought to the attention of Treasury in order to be addressed.
Mr Tomasek referred to the Response Document (page 30 in paragraph 3.3) about cut-off dates of future audits of the tax on retirement funds that was repealed on 1 March 2007. After discussions with the industry, it transpired that the cut-off date of 1 March 2008 was too early. It was decided that no additional assessments would be raised (except for fraud, misrepresentation or non-disclosure) from the 1 September 2008. The date of March 2010 would still apply for no assessments being allowed even if fraud, misrepresentation or non-disclosure of material facts existed.
Mr S Marais (DA) asked Treasury if they were convinced that what the Minister announced in the party statement was not going to be counter productive to provisions in the Revenue Laws Amendment Bill. He asked this question in relation to the importance of improving investments and minimising red tape.
Mr Tomasek said that the regulations did not apply to new investors bringing something unique to SA but only to those people trying to strip the South African tax base.
Mr K Moloto (ANC) asked for clarification on pension payouts and taxation after a divorce. He wanted to know if a pension is shared after a divorce, if tax would only be paid by the main member and not the other beneficiary.
Mr Tomasek said that the amount required for tax would be deducted from the pension payout.
Voting on Revenue Laws Amendment Bills & Securities Transfer Tax Bills
The Committee approved the adoption of all four bills.
Committee Report on the Medium Term Budget Policy Statement (MTBPS)
The Chair indicated that the Committee had to deal with the MTBPS within a short timeframe and that civil society did not have sufficient time for input. The Committee would require more time in future to deal with the MTBPS. The Committee went through the Report.
Mr S Njikelana (ANC) referred to the MTBPS section that dealt with tariffs. He said that the Trade and Industry Portfolio Committee would like to see certain industries protected from global competition until they were adequately developed. He mentioned the clothing and textiles industry, which was considered a priority. Tariff reductions would undermine the protection of priority industries. He asked if there was a way to reverse mention of tariff reductions. Some decisions about tariff deduction should not be made by South Africa alone, given that SA was part of the South African Customs Union (SACU) and the Southern African Development Community (SADC).
Mr Nene referred to page 5 of the Committees report on the MTBPS, which was neutral about tariff reductions. He asked that the Trade and Industry Committee to take up the issue of trade policy.
Mr Maloto said that the Minister of Trade and Industry would have to take up the issue of trade policy.
Mr Marais said that one could not look simplistically at tariff reductions. The Committee in conjunction with the Trade and Industry Committee, should look at how one could tailor a strategy to ensure the best for South Africa.
The Committee then adopted the Report.
Committee Reports on Annual Reports of National Treasury, Statistics South Africa, Financial Services Board and the South African Revenue Service
The Chairperson read the report on the Hearing of the Portfolio Committee on Finance on the Annual Report 2006/07 of the National Treasury.
The Committee adopted the report and recommended that the National Treasury provide more disaggregated figures in reporting on its attainment or non-attainment of disability targets. It was recommended that Treasury in future provided more specific as well as detailed reasons for under spending of particular programmes. The Committee felt that in some respects the shortage of information made the Annual Report inadequate as an oversight document.
The Chairperson read the report on the Hearing of the Portfolio Committee on Finance on the Annual Report 2006/07 of Statistics South Africa.
The Committee adopted the report of Statistics South Africa and recommended that Statistics South Africa provide more detail in future on under spending. The Committee recommended that Statistics South Africa take a more innovative and active approach to its staffing needs and that it also had to make more of an effort to employ more people with disabilities.
The Chairperson read the report on the Hearing of the Portfolio Committee on Finance on the Annual Report 2006/07 of the South African Revenue Services.
The Committee adopted the report of the South African Revenue Services and recommended that SARS provide a more detailed report on its employment of people with disabilities and a breakdown in terms of race and gender. It was also recommended that SARS provide progress reports on changing existing legislation. It was recommended that SARS provided a detailed update on the reclassification of existing debt. It was recommended that SARS report trends in its salary bill, following comments in the Annual Report that SARS might increase salaries as part of its staff retention plan. It was recommended that SARS provided a report on progress made on challenges experienced regarding the SADC transit system pilot project.
The Chairperson read the report on the Hearing of the Portfolio Committee on Finance on the Annual Report 2006/07 of the Financial Services Board (FSB).
The Committee adopted the FSB report and recommended that the FSB reported quantitatively in its Annual Report on employment equity. The Committee recommended that the FSB report not only on challenges but that it also report on its successes in future Annual Reports. The Committee recommended that the FSB give consideration to funding consumer education initiatives through its budget rather than relying on sponsorships.
The meeting was adjourned.
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