Legislative Engagements

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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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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 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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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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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 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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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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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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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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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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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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The South African Institute of Taxation (SAIT) reviewed the Draft DA 5 form and raised concerns that several provisions are misaligned with the Customs & Excise legislation, particularly Rule 9.02 and 9.03, which govern sealable goods on board ships. The submission highlights inconsistencies between the form and the legal limits for goods held by ship crew members, especially the unequal treatment between the master and other crew. It also questions outdated references, ambiguous definitions of excisable goods, and unclear treatment of ad valorem items. SAIT recommends aligning the form with current legislation, clarifying the purpose of certain provisions, and improving form instructions to avoid misinterpretation.
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The National Treasury

We have attached the Annexure C Proposals, which have been generated by the Tax Administration Technical Work Group. Part A discusses proposed clarification or alignment, whilst Part B discusses commentary on proposed changes. We appreciate the opportunity to participate in the process and would welcome further dialogue.