Dear Subscriber,

The budget speech buzz is on. There is talk in the corridors about what to expect from the Minister of Finance Trevor Manuel when he delivers the budget speech in Parliament on 21 February.

In the article, The Budget: What would we wish to see?, Ian Wilson of PricewaterhouseCoopers Tax Division provides us with some insight into taxpayers' expectations and speculations.

In the area of enforcement, SARS has now published consistent rules for the gathering of information relevant to taxpayers and transactions. There are still areas where change would be welcome such as secondary tax on dividends declared by companies (STC), the matter of taxation of groups of companies and much needed reforms in respect of retirement taxation.

According to Ian Wilson, SARS is now consistently exceeding its collection budget and the public service has, in the main, not reached its expenditure targets. There is definitely capacity for fiscal liberalisation and the modernisation of South African tax laws to make the country internationally competitive when it comes to principles and practices of taxation.

SARS has been accused of poor service to taxpayers in the past. On Tax Issues, ex-SARS employee, Minesh Bhugwandeen, currently an advocate and tax practitioner in private practice discussed where SARS stood when it comes to service. Click here for a summary of the full interview. Tax Issues is broadcast on Mondays at 20h40 and again at 22h40 on SUMMIT TV (DSTV CHANNEL 55).

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Until next week.
TAXtalk Editor

SUBSCRIBE to TAXtalk before the small business tax amnesty deadline on 31 May 2007 and receive a FREE TAXtalk Magazine subscription pack and be entered into a prize draw for 5 complimentary seminar seats, to The International Tax Institute's Small Business Tax Amnesty Seminar worth R650.00

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Ian Wilson, PricewaterhouseCoopers, Tax Division

It`s close to Budget Time with the 2007-2008 Budget being presented to Parliament in February. As usual, we turn our thoughts to what we can expect and do some speculating. The country is presently in a growth phase, and fiscal change is often more acceptable in times of relative prosperity. So this year could hopefully see some significant budget developments.

The past seven years have seen a major upgrade to SA taxation, aligning us more closely with the tax systems of major Western economies. Specifically, the move to a residence basis system of income taxation as well as the introduction of capital gains tax have expanded the tax base of the South African Revenue Service.

eTaxJobs is a global job portal exclusively for tax professionals, and an online resource for employers and recruitment firms to advertise their vacancies. eTaxjobs operate in the UK, Europe, USA, Canada, Australia, New Zealand, Africa and around the World.

Available tax jobs for this week are:

• Latin American Tax Manager, Argentina
• Interim Project Manager, Carribbean
• Tax Manager, betfair, London, UK, to £80,000
• International Tax Planner, Gibraltar, nr Spain
• Tax Structurer - Origination, London UK or Frankfurt, Germany

Greg Tarrant, KPMG Tax - TAXtalk Magazine Issue 4

Business may be overlooking possible tax concessions for Black Economic Empowerment (BEE) re-organisations and other costs incurred to meet the requirements of the various BEE charters and initiatives.

Business may look to the decisions reached in the Warner Lambert vs SARS case and the Sullivan principles to substantiate their case. Warner Lambert deducted certain costs incurred in complying with the US legislated Comprehensive Anti-Apartheid Act.

Tax Issues interview with ex-SARS employee, Minesh Bhugwandeen

SARS has been accused of poor service to taxpayers in the past. On Tax Issues, broadcast on Summit TV on Monday night, ex-SARS employee, Minesh Bhugwandeen, currently an advocate and tax practitioner in private practice discussed where SARS stood when it comes to service.

The first point Minesh made was that interactions with SARS are very positive at the moment. There might be problems in outlying areas, but in the main centres things were going swimmingly.

Are you sure of your rights as a taxpayer? Do you know how to deal with the processes of a SARS Audit? Would you like to learn why Transfer Pricing Provisions are constitutionally invalid – and not enforceable? Or, are you ready to find out what amnesties are available to corporate taxpayers – not just small businesses - for undisclosed income in 2006?

And would you like to know what effect the Royalty Judgement has on royalty papers? If you answered yes to any of the above questions, then don’t miss this one-day workshop with Tax Expert, Daniel Erasmus, and discover how you can prevent your business from falling foul of the law.

The Minister of Finance, Trevor Manuel, announced that as of August 2006 until May 31 2007 a Small Business Tax Amnesty will be in place. The International Tax Institute (ITI) will be unpacking the effects of the Small Business Tax Amnesty. Important aspects that will be covered at this ½ day event are:

• Who does tax amnesty apply to?
• Instances where amnesty will not apply
• General requirements
• Which taxes does amnesty apply to?
• How to apply for amnesty
• What is the effect of a successful amnesty application?

Sanchia Temkin

TAXPAYERS can expect changes relating to the tax treatment of investments in invested offshore schemes in the future, says Ernest Mazansky a director at Werksmans Tax.

Under the changes to the Income Tax Act, shares that are redeemed will no longer be regarded as a dividend. An amount paid by a company when it sells its shares will be considered a capital receipt.

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.

DE Tax Consulting

All Inland Revenue departments worldwide have extensive powers to investigate the business affairs of taxpayers to make sure they are getting their fair share of taxes.

Often the problem with this is that Inland Revenue departments will jump to conclusions in reassessing the taxes due to them, and then raise additional tax assessments that could run into the hundreds, if not, millions of dollars, with penalties and interest added.

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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!

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