Dear Subscriber,

Finance Minister Trevor Manuel delivered the Medium Term Budget Policy Statement (MTBPS) of 2006 to Parliament on Wednesday, 25 October 2006. Read Manuel's address to the National Assembly on the tabling the 2006 Medium Term Budget Policy statement, and the 2006/2007 Adjustments Appropriation Bill;
http://www.sars.gov.za/budget/MTBPS/speech.pdf.

This week on Tax Issues the funding of Black Economic Empowerment (BEE) transactions has become a very pressing and topical issue. In the first of a two-part series, Dr Emil Brincker, director at Edward Nathan discussed the different ways BEE transactions could be funded, how Section 38 of the Company's Act comes into play that it prohibits a company to assist shareholders to acquire shares in the company itself, ways of getting around Section 38, and discussion on the talk that the corporate law amendment bill would make provisions

for BEE acquisitions. A complete summary of the interview is available on the Tax Talk website: www.taxtalk.co.za . In Part 2 of this discussion next week, the tax implications of such transactions are considered.

Tax Talk invites you, our subscribers, to write to us with suggestions of tax topics about which you would like more information. We willinvite experts to speak on these topics on Tax Issues, broadcast on Mondays at 20h40 and again at 22h40 on SUMMIT TV (DSTV CHANNEL 55).

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Until next time
Tax Talk Publisher

Tax Talk

The funding of Black Economic Empowerment (BEE) transactions has become a very pressing and topical issue. In the first of a two-part series, Dr Emil Brincker, director at Edward Nathan discussed this matter on Tax Issues, broadcast on Summit TV on Monday night.

Dr Brincker started the discussion by stating that BEE transactions could be funded in two different ways, when buying into an existing company.

Sanchia Temkin - BusinessDay

THE risks of “catastrophic loss” arising from huge lawsuits are posing a threat to the auditing profession, say audit experts.

The US has seen lawsuits in which claimants have sought damages of $1bn against accounting firms.

Increased liability has been a concern for the auditing profession for several years and has been blamed for the loss of a number of highly skilled auditors.

Can you CONFIDENTLY answer the following questions? Call us NOW to Book your place on the Tax MasterClass and ensure your organizations future tax health.

• Where do you think your greatest Tax Risk lies?
• What is your documented tax policy/strategy?
• How good is your tax department's communication with the rest of your organization?
• Do they understand what your organizations REAL TAX RISK is?
• Do you know how Corporate Governance affects Tax Risk Management?
• How do you manage your relationship with your largest business partner, the South African Revenue Service?

Kerry de Hart - Tax Talk

In terms of the Income Tax Act a company or close corporation that meets all the requirements of section 12E of the Act will qualify for taxation benefits, for example a 100% write-off of assets purchased after 1 April 2001 and used in a process of manufacture or similar, an accelerated write-off of other assets purchased after 1 April 2005 as well as a lower rate of tax.

Tax Talk Magazine Issue 3

Are there warning signs of which a taxpayer should be aware when it comes to the possibility of future penalties and interest in my tax planning initiatives?

From personal individual tax to significant company tax changes - the subject is a hotly debated issue throughout South Africa's corporate environment. Tax Issues - every Monday at 20h40pm and again at 22h40pm - demystifies some of the latest developments and issues being discussed in the corridors of power. Tax Issues will cover; The impact of pending new tax laws on individuals and companies, The capital gains tax debate, New SARS initiatives to collect tax Changes to tax benefits, The VAT vs personal tax debate.

Sanchia Temkin - BusinessDay

THE South African Revenue Service (SARS) is aggressively pursuing transfer pricing compliance in the motor industry and the financial services sector could be next, according to tax experts.

Jacques van Rhyn, a tax director at PricewaterhouseCoopers, said last week that many businesses in the motor industry were underestimating the capabilities of SARS and were not taking the matter of a potential transfer pricing audit seriously.

Do you have something to say? Do you have an area of interest or expertise that you believe is something you can contribute for the interest of our readers? Do you want to share your views with like-minded people?

If so, send your submissions by email to (janine@taxtalk.co.za), fax (27 11 476 5004) or post (P.O. Box 1650, Gallo Manor 2052) and be heard!

We will publish the best stories and viewpoints on our website &/or in our weekly newsletter.

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Contact Janine at
janine@taxtalk.co.za
(011) 476 5095