Dear Subscriber,

Budget fever has been running high in the past week, with predications on what finance minister, Trevor Manual would do to ease the tax burden on the top of everyone's agenda.

According to Business Day, the past seven years have seen major upgrades to South Africa's tax system, aligning the country more closely with the tax systems of other western economies.

Major milestones in tax reform over the past seven years include:

• Adopting of a residence-based income tax system
• Introducing of Capital Gains Tax
• Graduate tax rates for small businesses
• A single tax year for all individuals
• Foreign exchange control and tax amnesty

• Legislation for the advance ruling system
• A general fuel levy on environmentally friendly alternative diesel fuel and zero rate for VAT purposes
• Reducing company tax, initially from 39 to 30% and then to 29%
• Repealing Regional Service Council levies
• Overhauling of the anti-avoidance rule
• Tax amnesty for small businesses
• Significant increase in transfer duty thresholds

Trevor Manual's announcement yesterday, that secondary tax on companies has been replaced by dividend tax, has added to the list of significant tax reforms for South Africa.

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Until next week.
Head of TAXtalk

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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TAXtalk

Secondary tax on companies (STC) that has been a thorn in the flesh of corporate South Africa for many years has now been replaced by a dividend tax. This was announced by minister of finance, Trevor Manual in his budget speech in parliament on Wednesday 21 February 2007.

TAXtalk

In his 11th annual budget speech held in parliament on 21 June, minister of finance, Trevor Manual built around the theme that all human life has equal worth. He said that this was the core value that unites us.

In order to sustain the exceptional current economic growth of 5%, Manual said that there should be increased focus on exporting goods and services, poverty eradication, erasing bureaucratic red tape, improving the performance of the public service and infrastructure improvement.

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:

• Group Tax Adviser, Vodafone, Newbury, UK
• Front Office Tax, US Investment Bank, London, UK
• Tax Manager, Client Transaction Team, Swiss Re, Zurich, Switzerland
• GST Manager, Big 4 Firm, Singapore
• Tax Planning Co-ordinator, Chevron (French Advantageous), London, UK

Ernest Mazansky - Werksmans Inc

At the time of writing this article the revised draft of the GAAR to replace section 103(1) of the Income Tax Act ("the Act") had been published for further comment, and it is expected that there will be some further tweaking of its terms (but definitely no substantive changes). By the time this article is published, the new GAAR will have been enacted by Parliament and will be awaiting the Presidents signature before it becomes law.

Interview with Rufus Ledwaba

Many South African companies pay a Skills Development Levy every month but are unsure how to reap benefits from this mandatory payment. Rufus Ledwaba, marketing director of Quality Executive Development discussed this matter on Tax Issues.

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.

Kerry Osborne - Marshall Inc

Taxation of scholarships and bursaries granted to employees and relatives of employees will be simplified by the Revenue Laws Amendment Bill of 2006. This is according to an article in Shepstone & Wylie Attorneys latest Commercial Law Review by Madeleine Schubert.

Currently, no tax is levied on scholarships and bursaries granted to employees provided that no salary sacrifice applies. A salary sacrifice is where an employee chooses to sacrifice part of his salary in exchange for another non-cash benefit. The same rule applies to the taxation of a scholarship or bursary granted to an employees relative.

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