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Taxpayers need to familiarise themselves with the new tax law changes following President Cyril Ramaphosa signing a series of new tax and finance-focused bills into law. These changes include the Rates and Monetary Amounts and Amendment of Revenue Laws Act (Rates Act), the Taxation Laws Amendment Act (TLAA), and the Tax Administration Laws Amendment Act (TALAA).
The Acts officially came into effect on 20 January 2021, primarily dealing with administrative and technical issues. However, Louis Kruger, a senior audit manager and Director at James & Kruger Inc., explains that while the new laws will not affect all taxpayers, Newcastillians should be aware of the changes which could potentially impact them.
Kruger highlights the most notable changes to the tax laws:
Withdrawal of retirement funds upon emigration (financial emigration) will not be allowed.
“Taxpayers will only be able to access their retirement benefits if they can prove they have been non-resident for an uninterrupted period of three years,” says Kruger.
In line with the latest Taxation Laws Amendment Bill, taking effect from 1 March 2021—Jean du Toit, Attorney and Head of Tax Technical at Tax Consulting South Africa, adds people will be allowed to withdraw their funds under the current dispensation if they file a complete application before 1 March 2021.
Reimbursive business travel expenses (meals and incidental costs)
Kruger explains these expenses will only be non-taxable; provided they do not exceed the amount specified in the government gazette (the applicable threshold is still being circulated for commentary before being finalised for publication).
Tax Consulting South Africa highlights the TLAA includes an amendment which extends the treatment to expenses incurred on meals and other incidental costs, while the employee is away on a day trip. It is necessary to note that this will only apply if the employer’s policies expressly make provision for and allows such reimbursement.
Employee Bursaries
“Employer-provided bursaries will no longer be exempt, where the employee’s remuneration is reduced as a result of the grant of such a bursary or scholarship,” affirms Kruger.
Estimated assessments may be raised by SARS.
According to Kruger, this can be done when the taxpayer fails to respond to a request for relevant material. “An objection of the estimated assessment may also not be lodged until the taxpayer responds to the request for material by SARS.”
SARS may withhold a taxpayers refund if they are under criminal investigation.
Regarding the Tax Administration Act, SARS is authorised to withhold refunds owed to taxpayers in certain situations.
Thanks to the changes, in terms of the Tax Administration Act, SARS is permitted to withhold any refund it owes you, pending the investigation’s outcome.
Negligent non-compliance can lead to the taxpayer being charged with a criminal offence.
Kruger stresses, “Taxpayers will now be held to a higher standard. The offences are subject to a fine or imprisonment of up to two years. The requirement for the offence to be intentional has been removed, and this has far-reaching consequences now in terms of compliance.”
With these changes now coming into action, Kruger concludes, “James & Kruger Inc. advises that taxpayers keep up to date with their submissions and payments of tax returns. Employers should also keep up to date with new amendments that might affect the calculation of their employees’ remuneration and PAYE (Pay As You Earn). Consult a tax consultant or an accountant, so they can assess your tax compliance status.”
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