Environmental and health taxes, tax administration & FinTech

Carbon Tax

The second draft Carbon Tax Bill was released during December 2017 and it is intended that the Bill will be enacted by end of 2018 with an effective implementation date of 1 January 2019.

Acid mine drainage levy

Government is considering a new levy to environmental damages and to make polluters pay for the cost of fund the treatment of acid mine water.

Health promotion levy

Sugar tax has long been on the radar for Government. The implementation date for the levy has been set as 1 April 2018.

Official rate of interest

The Income Tax Act makes reference to the “official rate of interest”. Currently the official rate of interest is 7.75%.  Given that the official rate of interest is currently lower than the prime rate of 10.25%, it is proposed that the official rate be adjusted to align it to the rates offered by commercial banks.

Electronic fiscal devices

In an effort to streamline its process, SARS proposes the utilisation of fiscal electronic devices which will assist the revenue authority with monitoring business transactions. Other administrative measures to be taken by SARS include the enhancement of the custom and excise system, with a particular focus on the tobacco industry.

Financial technology

The increase in financial technologies (FinTech) has brought about significant changes in financial and business models internationally. The growth of FinTech brings many benefits but also creates a number of social issues such as increased retrenchments.  The National Treasury, SARB, the Financial Services Board, and the Financial Intelligence Centre have been operating an Intergovernmental Working Group on Financial Technology and Innovation since 2016 to address these developments.

Cryptocurrencies

The budget speech confirmed that existing provisions and general principles of the current tax legislation apply to transactions undertaken using cryptocurrencies. However, there are certain administrative difficulties which arise due to the nature of this technology.

The income tax and VAT rules will be amended to cater for these peculiarities and to provide guidance and certainty to those taxpayers transacting in cryptocurrencies.

In addition, SARB is set to release another position paper in relation to cryptocurrencies which will shed light on future regulation and recognition of these now popular digital assets.