ATC231201: Report of the Select Committee on Finance on the Rates and Monetary Amounts and Amendment of Revenue Laws Bill [B35 - 2023] (National Assembly- section 77), dated 01 December 2023
NCOP Finance
Report of the Select Committee on Finance on the Rates and Monetary Amounts and Amendment of Revenue Laws Bill [B35 - 2023] (National Assembly- section 77), dated 01 December 2023
1.Introduction and background
Section 77 of the Constitution requires all money Bills to be considered by a procedure for passing revenue Bills established by the Money Bills Amendment Procedure and Related Matters Act, 2009 (Money Bills Act). Section 11 (4) of the Money Bills Act requires the Committee to hold public hearings on the revenue Bills and report to the House.
The Rates and Monetary Amounts and Amendment of Revenue Laws Bill (Rates Bill) was formally tabled on 01 November 2023. On 21 November 2023, the Select Committee of Finance (SeCoF) received a briefing from the National Treasury (NT) and the South African Revenue Service (SARS). Despite calling for public comments, the Committee received no submissions on the 2023 Rates Bill. The Committee held a meeting on 29 November 2023 to consider the Bill clause by clause and adopted the report on 01 December 2023.
2.Overview of the 2023 Rates Bill
The objective of the 2023 Rates Bill is to fix the rates of normal tax; to amend the Transfer Duty Act, 1949 so as to amend transfer duty monetary amounts; to amend the Income Tax Act (ITA), 1962, so as to amend rates of tax and monetary amounts; to amend the Customs and Excise Act (CEA), 1964, so as to amend rates of duty in Schedule 1 to that Act; to insert new tariff items; to delete tariff items; to delete rebate items; to insert rebate items; to amend the Carbon Tax Act (CTA) 2019; and to provide for matters connected therewith.
3.Summary of the proposed amendments in the 2023 Rates Bill
The proposed amendments in the 2023 Rates Bill include the inflation-related adjustments to tax tables, inflationary adjustments of general excise duty on alcohol and tobacco by between 4.5 and 6.5 per cent and delaying the increase of the Health Promotion Levy (HPL) by one year.
Tax brackets are increased to ensure there was no bracket creep, where people would earn a higher income aligned with inflation but be pushed into higher brackets. The tax tables, rebates, and medical tax will be adjusted by an estimated inflation of 4.9 per cent. The medical tax credits will increase from R347 to R364 per month for the first two members, and from R234 to R246 per month for additional members; and retirement tables and transfer duties will be increased by 10 per cent.
4.Committee observations and recommendations
4.1The Committee supports the increases in the cost of tobacco products and reiterates its concern that these increases appear to create space for the illicit tobacco market to grow while there is not enough attention being paid to acting against the illicit trade. The Committee recommends that with annual increases in excise tax, NT and SARS should intensify efforts to strengthen the fight against illicit trade of tobacco products.
4.2While delaying the implementation of the increases in the HPL raise public health concerns, the Committee supports the proposed extension of the increases in the HPL by one year and believes that the delay will allow the sugar industry to recover from the economic effects of the past events. The Committee recommends that NT should speedily finalise the discussion paper on the HPL Review on proposals to extend the levy to pure fruit juices and lower the 4-gram threshold.
The Select Committee on Finance, having considered and examined the Rates and Monetary Amounts and Amendment of Revenue Laws Bill [B35 - 2023] (National Assembly – section 77), referred to it, and classified by the JTM as a Money Bill, accepts the Bill.
Democratic Alliance reserved its position.
Report to be considered.