Legislative Engagements - South African Institute of Taxation

Legislative Engagements

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Re: Support Program For Industrial Innovation (SPII) – Discussion on Challenges Faced by Applicants

THE DEPARTMENT OF TRADE, INDUSTRY AND COMPETITION

As incentives consultants, it is our role to work together with clients and guide them through the application processes as set out by the DTIC. During the financial year 2019/2020 applicants for DTIC incentive programmes, particularly the Support Program for Industrial Innovation (“SPII”), have been experiencing several challenges.

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System Challenges Regarding Reinstatement of Tax Practitioners with Updated Passport Numbers

SAIT submitted a request to SARS highlighting a system issue affecting tax practitioners whose passport numbers change after visa renewals. Updated passport numbers are not automatically linked to existing Practice Registration (PR) numbers in SARS systems, disrupting access to services. SAIT requests system enhancements to link old and new passport numbers and interim guidance to support affected practitioners.
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RCB Forum Submission – SARS TPRP_01_11_2024

The RCB Forum’s submission to SARS outlines key concerns and recommendations regarding the implementation of the Tax Practitioner Readiness Programme (TPRP), which was introduced to standardize tax practitioner competency. While acknowledging SARS’s responsiveness to prior feedback—such as lowering the cooling-off period and clarifying assessment questions—the Forum emphasizes unresolved issues, including the prolonged reliance on Recognised Controlling Bodies (RCBs) to host the programme, the absence of a clear competency framework aligned to NQF level 4, an excessively high pass rate, and unclear justifications for the 3-month cooling-off period. The Forum proposes that SARS take over hosting the TPRP by 31 December 2025, develop a formal educational framework to inform the structure and difficulty of assessments, increase the question count to improve pass mark calculations, and provide candidates with feedback to guide remedial learning. Detailed commentary on ambiguous or unclear assessment items is also annexed, reinforcing the need for enhanced clarity, relevance, and fairness in the programme’s administration.

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SAIT_SARS Operational Submission_SARS blocking returns older than 5 years on eFiling

The document is a formal submission from the South African Institute of Taxation (SAIT) to SARS, expressing concern over SARS’s recent decision to block the submission of income tax returns older than five years via eFiling. SAIT highlights that this change contradicts the growing reliance on digital platforms, especially post-COVID, and creates significant challenges for taxpayers and practitioners. Despite SARS’s indication that tax practitioners would retain access, many report being redirected to branch offices. This has led to increased administrative burdens, delays, and potential non-compliance. SAIT urges SARS to reconsider the decision or expand branch capacity to manage the increased demand.
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SAIT_SARS Operational Submission_Dedicated service channels

The South African Institute of Taxation (SAIT) has submitted a request to SARS advocating for the creation of dedicated service channels to handle complex and time-sensitive tax matters—specifically pension fund directives, deceased estates, and exchange control processes. These issues often require specialized expertise and are not effectively resolved through standard SARS channels, leading to significant delays and inefficiencies. SAIT argues that dedicated communication and submission pathways would improve turnaround times, enhance service delivery, and support both taxpayers and practitioners in managing these intricate cases more effectively.
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SAIT_SARS Operational Submission_VAT217 assessment enhancements

The South African Institute of Taxation (SAIT) has formally requested SARS to enhance the VAT217 assessment process by including detailed grounds for additional VAT assessments. Currently, assessments often lack specific reasons—such as which invoices were disallowed or why they were deemed invalid—forcing vendors to submit separate requests for clarification, which wastes time and resources. Despite prior commitments from SARS to implement these enhancements by January 2024, assessments still lack sufficient detail. SAIT urges SARS to modernize the system to ensure transparency and enable vendors to respond effectively to assessments.
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SAIT_SARS Operational Submission_Unavailability of SARS Appointments_

The South African Institute of Taxation (SAIT) submitted a formal request to SARS regarding ongoing issues with the unavailability of virtual appointments for tax practitioners on the SARS eBooking system since November 2023. Despite SARS acknowledging a system error and promising a fix by December 2023, the issue persisted into 2024, affecting only practitioners and not individual taxpayers. SAIT disputes SARS’s explanation of an authentication error, arguing it’s unlikely all practitioners would face the same issue. They urge SARS to urgently investigate and resolve the problem to restore access and avoid further disruption to tax compliance services.
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SAIT Submission Commentary_BGR 4(Issue 4)

The SAIT submission provides commentary on Draft Binding General Ruling 4 (Issue 4), which addresses the apportionment methodology municipalities must apply to determine the VAT input tax deduction on mixed expenses as per section 17(1). SAIT highlights several technical concerns, including the incorrect reference to E11 instead of E9, the distortive impact of including gross debtor interest, the treatment of non-dividend profit share from joint ventures, the impracticality of requiring rulings for first-time dividend receipts, and inconsistencies in the treatment of forex gains and traffic fines in the apportionment formula. The submission also raises concerns about vague requirements and transitional rule dates, recommending clarity and proportionality in the final ruling.

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SAIT-Presentation-on-the-Fiscal-and-Revenue-Proposals-2025

The SAIT Presentation on the Fiscal and Revenue Proposals 2025, highlights the negative impacts of the upward trajectory of the country’s expenditure and the negative long-term effect that the growing debt-service costs will have on the economy. The presentation highlights the impact of the VAT increase on middle and lower-income taxpayers, emphasising the strain on discretionary spending. It discusses the lack of inflationary adjustments to personal income tax brackets, which we believe will continue to exacerbate economic inequality. In our presentation to the Standing and Select Committee on Finance, SAIT called for the modernisation of SARS’s systems, enhanced taxpayer rights, and the introduction of a withholding tax on tenderpreneurs to ensure compliance. Our presentation also underscores our support for the significant public-sector infrastructure investment and improved customs and excise enforcement to promote economic growth and transparency.

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SAIT Submission_Potential for Double Taxation Arising from Trust Distributions

SAIT submitted concerns to SARS about potential double taxation arising from trust distributions. The submission outlines how current tax rules—particularly Section 7C of the Income Tax Act and estate duty provisions—can result in both annual donations tax on interest-free loans and estate duty on the same amounts or growth, without offset. SAIT highlights unintended tax consequences of automatic trust distributions and calls for a review to prevent double taxation and ensure fair tax treatment.
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SAIT Submission_Taxation of Alcohol Beverages

The South African Institute of Taxation (SAIT) has submitted its official comments on the Taxation of Alcoholic Beverages Discussion Paper released by the National Treasury on 13 November 2024.This submission was compiled by the SAIT Customs and Excise Technical Workgroup and aims to provide insightful, practical feedback on the proposed reforms outlined in the Discussion Paper. Our response reflects the views of industry professionals and stakeholders committed to fostering a fair, transparent, and economically sound tax framework for the alcoholic beverage sector.We appreciate the opportunity to engage with the National Treasury on this important matter and trust our comments will be of value in shaping the way forward.

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SAIT Submission_ Commentary on the amendments to Form DA 5

SAIT submitted commentary to SARS regarding the revised draft amendments to Form DA 5, which concerns the declaration of sealable goods on ships. Initially, SAIT had concerns about the legal alignment of the amendment. However, after reviewing the updated draft (published 6 February 2025), SAIT confirmed that their concerns were addressed and expressed support for the revised form, commending SARS for incorporating their earlier feedback.

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SAIT Submission_ Carbon Tax Phase II Discussion Commentary

The South African Institute of Taxation (SAIT) provided feedback on the “Carbon Tax Discussion Paper: Phase Two” to the National Treasury, expressing support for maintaining revenue neutrality for electricity prices and incentive-based allowances, while raising concerns about the lack of reference to decreasing emissions in the 9th National GHG Inventory Report, the timing and effectiveness of increased carbon offset allowances, and the removal of the trade exposure allowance for fuel combustion emissions. SAIT also highlighted the significant increase in carbon tax rates, which could hinder investment in decarbonisation, and recommended extending existing incentives and introducing a new “Investment Allowance” for decarbonisation projects.
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Response to the Carbon Tax Discussion Paper: Phase Two of the Carbon Tax

The SAIT submission on the Carbon Tax Phase II Discussion Paper supports several proposals, including revenue neutrality in electricity pricing, incentive-based allowances, and continued relief for hard-to-abate sectors. However, it raises concerns about steep carbon tax increases, potential negative impacts on investment, limited availability of carbon offsets, and the removal of trade exposure allowances for fuel combustion. SAIT also critiques the linking of benchmark allowances to mitigation plan approvals and suggests extending existing incentives like Section 12L, introducing a new investment-linked carbon tax allowance, and ensuring the market is ready for offset expansion. The submission calls for a more balanced, gradual approach to ensure policy effectiveness without undermining industrial competitiveness.
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SAIT Submission_Part 1 of schedule NO. 1

SAIT supports the proposed amendments to Part 1 of Schedule No. 1, which aim to improve tariff classification clarity and efficiency. They note a potential concern for local manufacturers due to a reduced AfCFTA import duty rate but see no major issues overall.
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International Tax Technical Workgroup_ Annexure C submission

The SAIT International Tax Technical Work Group highlights a misalignment between current group rollover relief provisions in the Income Tax Act and the economic reality of loop structures, where South African residents hold interests in offshore entities that own local assets. Although intended to facilitate tax-neutral intra-group restructurings, the narrow definition of a “group of companies” under section 41 excludes these structures, leading to unintended tax inefficiencies. The submission proposes amending the legislation to broaden this definition, align with recent exchange control relaxations, and issue clear guidelines to ensure equitable tax treatment and better support corporate reorganisations without eroding the South African tax base.

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Customs and Excise Technical Workgroup_ Annexure C submission

The SAIT Customs and Excise Technical Work Group raises concerns over the disconnect between SARS’s recent policy announcements on low-value e-commerce imports and the existing Customs and Excise Act, 1964. While SARS introduced a four-tier system based on World Customs Organization (WCO) guidelines—intended to regulate de minimis shipments and prevent VAT and duty evasion—these categories remain absent from the formal legislation, creating legal uncertainty and enforcement challenges. The group explains how importers exploit loopholes by splitting consignments into smaller shipments to avoid duties. As a remedy, it recommends that the four categories be officially embedded in primary and secondary legislation to improve legal clarity, bolster compliance, align with international standards, and level the playing field for compliant businesses in the fast-growing e-commerce sector.

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Corporate Tax Technical Workgroup_ Annexure C submission

The SAIT Corporate Tax Technical Work Group recommends aligning the treatment of local hedge fund collective investment schemes (CIS) with other CIS categories by amending section 9D(2)(D) of the Income Tax Act. The issue arises because the 2024 Taxation Laws Amendment Bill expands the definition of a “company” to include hedge fund CISs but fails to update corresponding provisions that exempt CISs from controlled foreign company (CFC) rules. Without this adjustment, local hedge fund CISs investing in foreign counterparts may be inappropriately classified as CFCs, creating unnecessary administrative burdens. The group proposes synchronizing this amendment with future tax years to facilitate consistent and practical implementation within existing reporting frameworks.

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Business Tax Incentive s and Grants Technical Workgroup_ Annexure C submission

The SAIT Business Tax Incentives and Grants Technical Workgroup calls for the formal inclusion of several key government grant programmes—namely the Agro Industrial Fund (AIF), Manufacturing Support Program (MSP), Blended Finance Scheme (BFS), and the Automotive Investment Transformation Fund (AITF)—in the Eleventh Schedule of the Income Tax Act. Currently, the exclusion of these programmes from the list of tax-exempt grants limits their potential effectiveness by reducing clarity and discouraging participation. These programmes serve strategic economic goals, including agricultural development, manufacturing support, and transformation of the automotive sector. Incorporating them into the Schedule would ensure consistent tax treatment, encourage broader uptake, and better align with international best practices. The Workgroup urges the Minister of Finance to address the issue through consultation with stakeholders and timely gazetting of exemptions.

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SAIT submission draft IN on the diminution of stock

The South African Institute of Taxation (SAIT) submitted comments on SARS’s Draft Interpretation Note regarding the diminution in the value of closing stock. While SAIT found the technical content accurate and well-founded, it proposed minor revisions focused mainly on citation formatting and grammar. These included recommending consistent legal references, such as using full case names only once, and general improvements to the clarity and professionalism of the document. SAIT expressed appreciation for the opportunity to provide input and offered further engagement if needed.
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Tax Administration and Dispute Management Technical Workgroup_ Annexure C submission

The SAIT Tax Administration and Dispute Management Technical Work Group’s submission proposes key legislative reforms to improve fairness and efficiency in South Africa’s tax system, including aligning refund mechanisms for withholding taxes on royalties and interest with those for dividends, clarifying that tax assessment withdrawals under section 98 of the Tax Administration Act (TAA) are valid post-prescription, and refining the interpretation of “adequate security” in suspension of payment requests under section 164 to prevent SARS from demanding upfront payments in bona fide disputes. The submission also calls for aligning the objection and payment due dates to avoid prejudicing taxpayers seeking to suspend payment before formally disputing an assessment.

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VAT Technical Workgroup_ Annexure C submission

The SAIT VAT Technical Work Group’s submission proposes several targeted amendments to South Africa’s VAT legislation to address inconsistencies, close loopholes, and improve administrative efficiency—most notably, redefining “insurance” to require payment to prevent unintended VAT deductions, aligning documentation rules for zero-rated supplies, zero-rating airtime vouchers used exclusively outside South Africa, including silver in export provisions currently applicable only to gold, extending export timeframes for sea shipments of precious metals, harmonizing VAT registration rules for non-residents involved in exports, and expanding intermediary VAT rules to cover both local and foreign electronic service suppliers.

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SAIT submission_Draft DA 5_List of sealable goods on board ship

The South African Institute of Taxation (SAIT) submitted comments on the draft DA 5 form, expressing concern that the proposed amendments do not align with existing legislation governing the declaration of sealable goods on board ships. The submission highlights discrepancies between the form and Rules 9.02 and 9.03, particularly in the unequal allocation of goods between the ship’s master and crew, which contradicts the law. SAIT also points out unclear references to excisable goods and the impracticality of certain form elements for crew members. The Institute recommends that the form be revised to ensure full legal compliance, clarity, and practicality in its application.
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Wealth and Family Business Tax Technical Workgroup_ Annexure C submission

The SAIT Wealth and Family Business Tax Technical Work Group’s submission to the South African National Treasury and SARS outlines key tax reform proposals for inclusion in the 2025 Budget Review. The document highlights a critical mismatch between estate duty and capital gains tax (CGT) when assets are transferred to a trust for the benefit of a surviving spouse. While estate duty allows for deferral in such cases, CGT does not, creating financial strain for vulnerable elderly spouses. The submission proposes aligning CGT and donation tax laws with estate duty provisions to extend rollover relief to trusts benefiting spouses, both during marriage and upon death. This alignment would better protect aging individuals from financial exploitation and ensure equitable tax treatment. Additionally, the document addresses the tax treatment of distributions from South African inter-vivos trusts to non-resident beneficiaries, emphasizing the need for clarity and fairness in light of recent legislative changes.

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Personal Employment Taxes_ Annexure C submission

The SAIT Personal & Employment Taxes Technical Work Group submitted proposals for the 2025 Budget Review aimed at improving tax administration and legislative clarity. The submission recommends aligning UIF and SDL obligations for foreign employers with the Income Tax Act by linking them to the presence of a permanent establishment in South Africa. It also proposes allowing a single designated employer within a group of companies to handle all employment tax obligations to reduce administrative burdens and potential penalties. Lastly, it calls for legislative clarification to align tax registration requirements for digital nomads with recent immigration regulations, ensuring consistency with international tax agreements.
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SAIT Submission on the Draft IN re meaning of similar finance charges

SAIT’s submission on the draft interpretation note regarding “similar finance charges” under section 24J of the Income Tax Act argues that the current SARS interpretation may not align with the legislative intent or practical application of the provision. SAIT maintains that section 24J is primarily concerned with determining whether a financial instrument exists, and once that is established, all amounts payable under the instrument, including fees such as raising, structuring, and origination fees, should be included in the interest calculation using the yield-to-maturity method. Citing case law (IT 25042) and the 1995 Explanatory Memorandum, SAIT emphasizes that these charges are integral to the cost of borrowing and should not be treated separately. It concludes by recommending that SARS revise the draft to ensure consistency, clarity, and alignment with both legal precedent and the realities of financial transactions.

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SAIT Submission_Deduction in respect of production of battery electric and hydrogenpowered_Section 12V

In this submission, SAIT expresses concern over the exclusion of hybrid vehicles from the tax incentive proposed under Section 12V for battery electric and hydrogen-powered vehicles, highlighting a contradiction between the National Treasury’s response to the 2024 Draft Tax Bills and commitments made during the President’s address at SA Auto Week. The draft legislation limits incentives to Zero Emission Vehicles (ZEVs), while plug-in hybrid and hybrid vehicles are excluded on the basis that existing support is available through the APDP2 programme. However, the NAAMSA media statement—cited in the submission—indicates that hybrids were expected to be part of the incentive strategy. SAIT argues that all New Energy Vehicles (NEVs), including hybrids, should be included in the Section 12V framework to ensure policy coherence, support South Africa’s decarbonisation goals, and maintain the country’s competitiveness in the global automotive supply chain.

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SAIT Submission_Verification Trust tax returns 241024

SAIT raises concerns over SARS’s issuance of “verification” letters for trust income tax returns that request detailed information—such as income and expense breakdowns per fixed property—which in SAIT’s view, extends beyond the legal definition of verification. Citing the Forge Packaging case, SAIT argues that such requests resemble the characteristics of an audit, which involves deeper interrogation of information, third-party corroboration, and assessment of completeness and authenticity. Since the requested information often requires manual analysis and is not readily available from trusts’ typically unsophisticated annual records, the demands are impractical and burdensome. SAIT contends that these letters should be formally classified as audits under Section 42 of the Tax Administration Act, rather than verifications, and requests SARS either revise its classification or provide detailed justification for its current approach.

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SAIT Submission_ Summary of SAIT Presentation on the 2024 DTLAB and DATLAB

The South African Institute of Taxation (SAIT) presented comprehensive feedback on the 2024 Draft Taxation and Administration Laws Amendment Bills, highlighting several key concerns. These included practical challenges with proposed changes to the input VAT prescription period, the unbalanced treatment of currency losses under section 24I, and the risk of double taxation from anti-avoidance trust amendments. SAIT supported changes around public officer appointments but raised concerns about the risks faced by default appointees. The submission questioned allowing non-legal practitioners to represent taxpayers in Tax Court without clear “fit and proper” criteria and advocated for moving the ADR process earlier while ensuring independence. Additional comments addressed insufficient relief for unlisted real estate funds, confusion around retrospective amendments to fuel legislation, and the need for collaboration rather than punishment in ETI reforms. Concerns were also raised over VAT changes affecting B2B services, electronic supplies, and education sector exemptions, with SAIT calling for improved clarity, thresholds, and consultation.

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SAIT Submission_ Draft amendments to Part 1 of Schedule 1

SAIT’s submission on the draft amendments to Part 1 of Schedule No. 1 welcomes SARS’s initiative to insert Additional Notes and new tariff subheadings to clarify the treatment of herbal and homeopathic medicinal preparations under heading 3004. SAIT views this as a positive step toward resolving long-standing ambiguity in the customs clearance process, which has caused delays due to inconsistent interpretations and lack of awareness about SAHPRA requirements. However, it raises concerns about the duplication of SAHPRA references in the draft and seeks clarification on licensing requirements. Additionally, SAIT stresses the need for coordination between SARS and other government agencies (OGAs) to prevent conflicting information between tariff schedules and the published list of prohibited and restricted goods.
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SAIT Submission_Meaning of reserve fund under section 23(e)

SAIT’s submission on the draft interpretation note regarding the meaning of a “reserve fund” under section 23(e) of the Income Tax Act questions the inclusion of insurance policies as reserve funds. SAIT argues that insurance premiums represent incurred expenses, not reserve transfers, and notes that such policies—particularly those related to death, disability, or illness—are explicitly disallowed under section 23(r). The submission emphasizes that a reserve fund typically involves a deliberate accounting provision, which is not the case with insurance premiums. SAIT recommends removing the draft’s reference to insurance-related reserve funds, as it misrepresents the accounting and legal nature of such expenditures.
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SAIT Submission_Draft Guide pertaining to the Mineral and Petroleum Resources Royalty Act

The South African Institute of Taxation (SAIT), along with members of its mining industry technical workgroup, submitted comments on SARS’s draft guide concerning the Mineral and Petroleum Resources Royalty Act. They noted that while royalty calculations for refined minerals like gold are relatively straightforward, the draft guide lacks sufficient detail to effectively support taxpayers, especially regarding complex scenarios involving unrefined minerals. SAIT emphasized the need for clearer guidance on the treatment of pre-2004 dumps—materials not subject to royalties—particularly when mixed with royalty-bearing materials. They also recommended including examples and a more defined framework for cost allocation in EBIT calculations. SAIT expressed appreciation for the opportunity to contribute and welcomed further engagement.
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SAIT Personal and Employment Taxes WG submission_Draft Tax Bill

SAIT’s submission on the draft interpretation note regarding the meaning of a “reserve fund” under section 23(e) of the Income Tax Act questions the inclusion of insurance policies as reserve funds. SAIT argues that insurance premiums represent incurred expenses, not reserve transfers, and notes that such policies—particularly those related to death, disability, or illness—are explicitly disallowed under section 23(r). The submission emphasizes that a reserve fund typically involves a deliberate accounting provision, which is not the case with insurance premiums. SAIT recommends removing the draft’s reference to insurance-related reserve funds, as it misrepresents the accounting and legal nature of such expenditures.

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SAIT Environmental Tax WG submission_DTLAB

The SAIT Environmental Tax Technical Work Group submitted comments on the Draft Taxation Laws Amendment Bill, 2024, focusing on proposed changes to environmental tax provisions under the Carbon Tax Act. The group recommends retaining full calorific value ranges to support accurate emissions reporting, aligning fuel values (e.g., for coal and diesel) with Department of Forestry, Fisheries and Environment (DFFE) guidelines, and including South Africa-specific emission factors. They call for clearer unit specifications in emissions tables, clarification on whether carbon offset capacity thresholds apply per project or entity, and updates to ensure cullet is excluded in glass emission factors. Finally, they urge that the Act explicitly state whether Tier 1, 2, or 3 emissions methodologies may be used and whether these must align with DFFE submissions to avoid confusion currently caused by ambiguous legislative language.
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SAIT Customs and Excise WG submission_DTALAB

The SAIT Customs and Excise Technical Work Group submitted comments on the Draft Taxation Administration Laws Amendment Bill, 2024, focusing on the proposed retrospective reclassification of fuel products under tariff heading 27.10. The submission addresses concerns regarding the reclassification of “light oils and preparations” from subheading 2710.11/12 to 2710.19, effective from 1 January 2002, which may require affected traders to retrospectively apply for manufacturing or storage licenses and import permits. SAIT highlights the potential compliance and licensing implications for industry stakeholders, especially given ambiguities around the application of subheading notes related to distillation thresholds. The group requests urgent clarification on how the reclassification should be interpreted and implemented, particularly where products do not meet the 210°C distillation requirement, and whether the broader 362°C threshold in Note 1(g) should guide classification under 2710.19.
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SAIT Submission International Business Tax_DTLAB

The SAIT International Business Tax Work Group provided feedback on the 2024 Draft Taxation Laws Amendment Bill, supporting clarifications on hyperinflationary currency translation, shareholding periods, foreign tax rebates on capital gains, and CFC income rules. However, they raised concerns about proposed changes to section 24I of the Income Tax Act, particularly the expanded definition of “exchange item” and the ring-fencing of foreign exchange losses. SAIT cautioned that these changes could create inconsistencies, penalize trading companies, and deviate from the original intent of section 24I. They recommended aligning the treatment of hybrid instruments with existing anti-avoidance provisions and suggested that section 20, rather than section 24I, be amended to manage exchange losses for non-trading entities. They also flagged minor drafting errors for correction.
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SAIT Tax Administration and Dispute Management Draft Tax Bill

The SAIT Tax Administration and Dispute Resolution Work Group submitted comprehensive feedback on the 2024 Draft Tax Administration Laws Amendment Bill, addressing key concerns around taxpayer representation in the Tax Court, cost recovery by SARS officials, and expanded powers for SARS in debt recovery. The submission critiques the lack of clarity in defining “fit and proper” representatives, warns of administrative burdens in cost taxation, and raises concerns about the impact of SARS interviews on taxpayer rights. It supports amendments aligned with constitutional rulings on taxpayer confidentiality and suggests clearer dispute resolution procedures, especially regarding ADR and tax board jurisdiction. The group also highlights the need for practical relief for companies in business rescue, particularly regarding tax compliance status, and welcomes clarity on public officer appointments.
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SAIT VAT Technical WG submission

The SAIT VAT Technical Work Group submitted detailed commentary on the 2024 Draft Taxation Laws Amendment Bill, focusing on proposed changes to the VAT Act. Key issues addressed include clarifying VAT treatment for services to non-resident subsidiaries, Islamic finance arrangements, and input tax claim periods. The submission raises concerns about administrative burdens, system limitations, and unintended consequences—particularly for educational institutions and foreign donor-funded projects. It also critiques the proposed broadening of VAT exemptions for educational institutions, warning of financial and compliance impacts, especially for universities. The group recommends practical alternatives, such as phased implementation, clearer definitions, and system adaptations, to ensure fair and efficient VAT administration.
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SAIT Business Tax Incentive and Grants WG submission_DTLAB_31 August 2024_Final

The SAIT Business Tax Incentives and Grants Technical Work Group submitted comments on the Draft Taxation Laws Amendment Bill, 2024, specifically regarding the proposed section 12V incentive for investments in buildings, machinery, and equipment used in producing electric and hydrogen-powered vehicles. While the group welcomed the incentive’s design and lower qualification threshold, they highlighted that original equipment manufacturers (OEMs) and component manufacturers, who play a key role in the supply chain, may be excluded from the incentive despite needing significant investment to adapt their facilities. SAIT acknowledged the fiscal constraints of extending the 150% tax allowance to component manufacturers, who already benefit from cash grants through the Department of Trade, Industry and Competition, but requested clarity on whether these manufacturers may be included in the future or if additional criteria might apply to determine eligibility.
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SAIT Submission on the Draft Guide to Income Tax Benefits in Special Economic Zones

The SAIT submission on the Draft Guide to Income Tax Benefits in Special Economic Zones (SEZs) supports the guide’s clarity but identifies key areas requiring correction and clarification. First, SAIT points out that the guide references the outdated name “Department of Trade and Industry (DTI)” instead of the current “Department of Trade, Industry and Competition (DTIC),” and requests this be corrected throughout the document. Second, the guide’s mention of section 12I incentives may mislead readers into thinking new applications are still possible, when in fact the application window closed on 31 March 2020. SAIT recommends a note be added to clarify that only previously approved projects within their compliance periods can still benefit from the section 12I incentive.
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SAIT Submission_Draft Guide On The Allowances And Deductions re Assets Used In The Generation Of Electricity From Specified Sources Of Renewable

The SAIT submission on the Draft Guide issued by SARS regarding allowances and deductions for renewable energy assets welcomes the overall clarity and structure of the document but raises concerns about potential limitations in its practical application. Specifically, SAIT highlights that foundations or supporting structures integral to renewable energy systems, such as solar PV installations, should be deductible under sections 12B and 12BA if they are functionally integrated and share the same useful life as the primary asset. However, the guide appears to exclude costs related to improvements, such as structural roof reinforcements or parking lot installations, where the supporting infrastructure may still serve other purposes after asset removal. SAIT urges SARS to reconsider the narrow interpretation of eligible deductions under section 12BA to ensure the intended tax relief reaches taxpayers making qualifying renewable energy investments.

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SAIT_Customs and Excise Submission _Draft amendments to the rules under sections 21(1), 60 and 120_

On 20 August 2024, the South African Institute of Taxation (SAIT) submitted detailed comments to SARS regarding the draft amendments to the rules under sections 21(1), 60, and 120 of the Customs and Excise Act. These amendments introduce a new special customs and excise warehousing framework specifically for imported bunker fuel. SAIT raised practical concerns about the clarity and feasibility of several proposed provisions, particularly regarding record-keeping obligations, documentation requirements (such as the DA1 and DA3 forms), and the operational implications for warehouse licensees. The submission emphasizes the need for clear legislative guidance, streamlined compliance expectations, and flexibility to avoid excessive administrative burdens that could hinder trade facilitation. SAIT recommends that only essential documents be required from licensees and calls for improved clarity on procedures involving temporary imports, self-propelled storage vessels, and movements involving mixed modes of transport.
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SAIT Submission_ Draft Amendment proposed to schedule NO. 5 to the Customs and Excise Act,1964.

In this submission, SAIT expresses concern over the exclusion of hybrid vehicles from the tax incentive proposed under Section 12V for battery electric and hydrogen-powered vehicles, highlighting a contradiction between the National Treasury’s response to the 2024 Draft Tax Bills and commitments made during the President’s address at SA Auto Week. The draft legislation limits incentives to Zero Emission Vehicles (ZEVs), while plug-in hybrid and hybrid vehicles are excluded on the basis that existing support is available through the APDP2 programme. However, the NAAMSA media statement—cited in the submission—indicates that hybrids were expected to be part of the incentive strategy. SAIT argues that all New Energy Vehicles (NEVs), including hybrids, should be included in the Section 12V framework to ensure policy coherence, support South Africa’s decarbonisation goals, and maintain the country’s competitiveness in the global automotive supply chain.
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SAIT_Submission re draft tariffs amendments_Schedule 1 – 5

The South African Institute of Taxation (SAIT) submitted comments to SARS regarding the draft tariff amendments to Schedules 1 to 5. SAIT supports the proposed creation of new 8-digit tariff subheadings for mangoes, dried grapes, and pomegranates to enhance trade data accuracy and levy collection. It also welcomes the deletion of outdated provisions related to the original Automotive Production and Development Programme (APDP I) in Schedules 3, 4, and 5, following the implementation of APDP II in 2021. SAIT views the amendments as necessary updates that streamline the tariff framework and improve trade administration.
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SAIT_Submission re draft amendments pertaining EV’s

In this submission, SAIT expresses concern over the exclusion of hybrid vehicles from the tax incentive proposed under Section 12V for battery electric and hydrogen-powered vehicles, highlighting a contradiction between the National Treasury’s response to the 2024 Draft Tax Bills and commitments made during the President’s address at SA Auto Week. The draft legislation limits incentives to Zero Emission Vehicles (ZEVs), while plug-in hybrid and hybrid vehicles are excluded on the basis that existing support is available through the APDP2 programme. However, the NAAMSA media statement—cited in the submission—indicates that hybrids were expected to be part of the incentive strategy. SAIT argues that all New Energy Vehicles (NEVs), including hybrids, should be included in the Section 12V framework to ensure policy coherence, support South Africa’s decarbonisation goals, and maintain the country’s competitiveness in the global automotive supply chain.
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SAIT Submission regarding the MSP guidelines

The South African Institute of Taxation (SAIT) submitted feedback on the Manufacturing Support Programme (MSP) guidelines issued by the Department of Trade, Industry and Competition (DTIC). The guidelines are intended to assist applicants in preparing submissions and to guide DTIC in evaluating applications. SAIT raised several clarifying questions and concerns, including issues around the sourcing of inputs, the definition of raw materials, application timelines, and funding limitations. Key points of inquiry included whether locally sourced but imported goods qualify, if agricultural raw materials count, and whether applicants with multiple sites or funding from other programs can apply. Overall, SAIT welcomed the opportunity to provide input and expressed willingness to engage further on the matter.
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SAIT Submission_Draft IN Income Tax Exemption – Water Services Provider

The South African Institute of Taxation (SAIT) reviewed SARS’s draft interpretation note regarding income tax exemptions for qualifying water services providers under section 10(1)(t)(ix) of the Income Tax Act. SAIT agreed with the technical interpretation provided and did not raise substantive objections. However, it identified several minor technical and grammatical issues, which are detailed in Annexure A of the submission. SAIT welcomed further engagement if required.

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SAIT Submission_Storage of Imported Bunker Fuel in Special Customs and Excise Storage Warehouses

The South African Institute of Taxation (SAIT) has submitted comments on the draft amendments to the Rules under sections 21(1), 60, and 120 of the Customs and Excise Act concerning the storage of imported bunker fuel in special customs and excise storage warehouses. SAIT supports the intent of the proposed rules to fill a regulatory gap and provide much-needed clarity for an essential industry. However, they raise several concerns regarding inconsistencies, unclear definitions (such as “duly entered”), and potentially impractical operational provisions. SAIT recommends further refinement of the rules, alignment with existing legislative frameworks, and urges SARS to engage stakeholders through public consultations to ensure balanced implementation that supports both control and trade facilitation.

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SAIT Submission _Battery Energy Storage Asset

The South African Institute of Taxation (SAIT) submitted a proposal to the National Treasury highlighting a legislative gap in section 12B of the Income Tax Act, which currently does not explicitly accommodate battery energy storage systems. These assets, though primarily for storage, are treated by regulators like NERSA as electricity-generating due to their role in energy supply via the Battery Energy Storage Independent Power Producer’s Procurement Programme (BESIPP). SAIT argues that battery storage assets should qualify for the accelerated capital allowance under section 12B, similar to other generation assets, to incentivize investment and better align tax policy with energy infrastructure initiatives.
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SAIT_Submission_ Commentary on draft amendment to Schedule 5 (Insertion of Note 8)

The South African Institute of Taxation (SAIT) submitted a brief commentary on the draft amendment to Schedule 5 of the Customs and Excise Act, specifically regarding the insertion of Note 8 and Item 541.01. This amendment aims to allow for specific drawbacks and refunds of customs duties on imported fuel levy goods that are later exported or removed to BELN (Botswana, Eswatini, Lesotho, and Namibia). SAIT supports the proposed changes, agreeing with SARS’ rationale and highlighting that the amendment provides a valuable opportunity for exporters who missed initial clearing processes to still submit claims. SAIT expressed no objections and welcomed the positive impact the amendment could have on exporters.

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SAIT Submission__Request for Reconsideration of Previously Submitted Proposals_Corporate Tax

The South African Institute of Taxation (SAIT) submitted a formal request to the National Treasury to reconsider two previously submitted corporate tax proposals. The first relates to section 42(8) of the Income Tax Act, where SAIT argues that the rollover relief from asset-for-share transactions is negated when followed by a liquidation (section 47) or unbundling (section 46), resulting in a loss of the intended tax benefit. The second concerns section 23(c), which disallows deductions for losses covered by insurance, even though the insurance proceeds are taxable—creating an inequitable outcome for taxpayers, particularly evident in real-life cases involving trading stock losses. SAIT urges the Treasury to re-evaluate both provisions to ensure fair and consistent tax treatment.

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SAIT International Tax WG Submission_Global Minimum Tax Bill

The SAIT International Business Tax Technical Work Group submitted comments on the Draft Global Minimum Tax Bill and its accompanying Administration Bill, raising critical concerns regarding the effective date, legal risks of the ambulatory approach referencing evolving OECD guidance, and lack of clarity around the application of model rules, record-keeping, and government incentives. The submission also flagged technical ambiguities related to foreign income taxation, top-up tax calculations, and constituent entity responsibilities. The group emphasized the administrative and legal challenges of retrospective implementation from 1 January 2024 and urged prompt finalization to ensure tax certainty for multinational entities.

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SAIT Mining Industry Tax WG Submission_Global minimum tax bill

The SAIT Mining Industry Tax Technical Work Group submitted detailed comments on the 2024 Draft Global Minimum Tax Bill, raising key concerns around its retrospective application, the ambiguity and legal uncertainty introduced by the ambulatory approach referencing OECD updates, and the exclusion of rehabilitation trusts from exemptions. The group also sought clarity on the treatment of mining royalty tax, deferred tax assets, and the definition of the Qualified Domestic Minimum Top-Up Tax (QDMTT) safe harbour. Additionally, they requested either an extension for submissions or permission to submit a supplementary addendum due to the bill’s significant implications for the mining sector.

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SAIT Submission_Consequences of an employers failure to deduct or withhold PAYE

The South African Institute of Taxation (SAIT) submitted commentary on SARS’s draft Interpretation Note concerning the consequences for employers who fail to deduct or withhold PAYE. SAIT emphasizes the need for clarity on several key issues, including the tax treatment of grossed-up remuneration when employers pay employees’ tax, the correct timing for recognizing fringe benefits, and the legal implications of employer liability. They argue that current interpretations may lead to unfair double taxation and misalignment between tax obligations and deductions. SAIT recommends specific amendments to the draft note to ensure legal accuracy, fairness, and practical guidance for both employers and employees.

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SAIT_Customs and Excise Submission_Draft amendments rules under section 40(3), 41(4) and 120

The South African Institute of Taxation (SAIT) submitted comments on SARS’s draft amendments to customs rules under sections 40(3), 41(4), and 120 of the Customs and Excise Act, focusing on the treatment of transfer pricing adjustments affecting customs value. SAIT’s Customs and Excise Work Group raised concerns about the administrative burden and impracticality of requiring individual adjustments for each customs declaration, especially when adjustments span multiple entries over time. They recommend implementing a streamlined system allowing for consolidated adjustments, extending submission deadlines, clarifying documentation requirements (including transfer pricing policies), and ensuring flexibility in handling complex data submissions. The submission emphasizes the need for practical, efficient processes that align with business realities while maintaining compliance.

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SAIT Submission – Request for the issue of a BGR

The South African Institute of Taxation (SAIT) submitted a request to SARS for the issuance of a Binding General Ruling (BGR) to clarify the interpretation of “held” and “market value” in the context of asset-for-share transactions under sections 42 and 24BA of the Income Tax Act. SAIT argues that beneficial ownership, rather than registered ownership, should determine whether a qualifying interest exists at the time of asset disposal, even if administrative steps like share certificate issuance occur later. They also contend that for section 24BA(3), the market value of shares should be assessed based on the agreed commercial terms at the time of asset disposal, not at the time of physical share issuance. This clarification is sought to ensure legal certainty and prevent unintended tax consequences due to administrative delays.

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SAIT Submission_Solar Energy Tax Credit Provided under Section 6C

The SAIT Personal & Employment Taxes Technical Work Group submitted comments on the draft guide for the solar energy tax credit under section 6C of the Income Tax Act, aimed at encouraging residential solar adoption to ease pressure on South Africa’s power grid. The submission clarifies that eligibility for the credit depends on when the solar panels are brought into use—not when they are acquired—allowing panels purchased before 1 March 2023 to qualify if installed within the specified period. SAIT also recommends clearer guidance on eligibility for non-owners like lessees, the ability to split the credit among multiple occupants, and whether separate electrical compliance certificates are needed when multiple individuals jointly acquire the panels.

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SAIT Submission_Comments on the draft amendments to rules under section 40(3), 41(4) and 120 – Effect of transfer pricing on customs value

The SAIT Customs and Excise Work Group’s submission on the draft amendments to rules under sections 40(3), 41(4), and 120 of the Customs and Excise Act addresses the complexities introduced by transfer pricing adjustments on customs value. The group raises concerns about the administrative burden of requiring individual corrections for each customs declaration and recommends implementing a streamlined system that allows for consolidated adjustments. They also propose extending deadlines for submitting documentation, clarifying the treatment of transfer pricing policies, and ensuring flexibility in handling large volumes of data. The submission emphasizes the need for practical, efficient processes that align with business realities while maintaining compliance with customs legislation.

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SAIT Personal and Employment WG Annexure C submission 2

The SAIT Personal and Employment Taxes Technical Work Group’s submission proposes amendments to Section 12H of the Income Tax Act to better accommodate university graduates (NQF Level 7 and above) participating in professional articles or internship programmes. The current framework, which ties tax incentives to the attainment of new NQF levels, unintentionally excludes many graduate trainees who already possess high-level qualifications and do not seek further academic credentials. SAIT recommends that these trainees instead be allowed to qualify for the incentive by completing structured programmes that lead to professional designations registered with the South African Qualifications Authority, thereby aligning the tax incentive with the realities of graduate professional development and reducing administrative burdens.

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SAIT Customs and Excise Submission Amendments to rules under sections 21, 60 and 120 – Fuel levy goods

The SAIT Customs and Excise Work Group submitted comments on the draft amendments to rules under sections 21, 60, and 120 of the Customs and Excise Act, focusing on the treatment and regulation of fuel levy goods. The submission highlights several areas needing clarification, including the correct referencing of rule insertions, the definition and treatment of duties and levies on fuel removed to BELN countries, and the meaning of terms like “equivalent fuel levy goods” and “consistently acceptable quality.” SAIT also raised concerns about vague regulatory requirements for licensing marine removers and recommended that SARS clearly specify documentation and compliance expectations. The group emphasized the need for precise language and definitions to ensure legal certainty and reduce administrative burdens for industry stakeholders.

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SAIT Submission Customs and Excise Rule Amendments Comment Sheet

The SAIT Customs and Excise Work Group submitted detailed comments on the draft amendments to customs and excise rules, highlighting technical inconsistencies, ambiguities, and practical concerns. Key issues include incorrect rule references, unclear definitions around fuel levy goods and their treatment when exported to BELN countries, and the lack of clarity on whether domestic levies are refundable. SAIT also raised concerns about vague language in rules governing the mixing of fuel products and the documentation required for regulatory compliance. They recommend clearer rule formulations, specific documentation requirements, and the inclusion of all relevant business types and regulatory expectations in the final published forms and rules to ensure legal certainty and ease of compliance for industry stakeholders.

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