In a significant move to bolster its climate change mitigation efforts, South Africa has announced an increase in its carbon tax. Effective from January 1, 2025, the carbon tax will rise from R190 to R236 per tonne of carbon dioxide equivalent (tCO2e). Additionally, from April 2, 2025, the carbon fuel levy will increase by 3c/litre to 14c/litre for petrol and 17c/litre for diesel, as mandated by the Carbon Tax Act of 2019.
In a significant move to boost revenue, the South African government has announced a two-phase increase in the Value Added Tax (VAT) rate. The first increase of 0.5 percentage points will take effect on 1 May 2025, followed by another 0.5 percentage point increase on 1 April 2026. This decision comes after careful consideration of the potential contributions of various tax instruments, with VAT being identified as an efficient and broad-based source of revenue.
The 2025 Budget Speech addressed the economic stagnation of the past decade, with GDP growth averaging less than 2%. In 2024, the economy grew by only 0.6%, and medium-term projections estimate an average growth of 1.8%. The speech emphasized the need for faster, inclusive economic growth to meet developmental goals.
The South African Revenue Service (SARS) has announced a significant milestone in the implementation of the two-pot system, with a total of 2,664,279 applications for tax directives received to date. Of these, 2,403,379 applications have been approved, resulting in a total gross lump sum payout of R 43.42 billion.
Obtaining a tax directive from the South African Revenue Service (SARS) is a crucial step for employers, fund administrators, and insurers to ensure the correct deduction of employees' tax from lump sum payments. This process is essential for managing tax liabilities on retirement funds, severance packages, and other lump sum benefits.
The South African Revenue Service (SARS) has announced key updates for the 2024 tax filing season, which commenced on July 1, 2024. This year, SARS will continue issuing auto-assessments for taxpayers with simpler tax affairs. Taxpayers are advised to check their auto-assessment status via eFiling or the SARS MobiApp, following an SMS or email notification.
Starting from 1 September 2024, individuals planning to withdraw from the savings pot of the Two-Pot Retirement System must be registered for tax. Unregistered individuals must complete their registration before applying to their relevant fund, as unregistered requests will be rejected by SARS.
SARS has introduced a comprehensive draft guide outlining tax incentives to boost renewable energy generation. Taxpayers can benefit from accelerated deductions, enhanced deductions for new assets, and deductions for expenses related to infrastructure construction. These incentives aim to encourage investment in renewable energy projects, support sustainable practices, and drive economic growth in the renewable energy sector.
In a recent development, the South African Revenue Service (SARS) has issued a Binding General Ruling (Income Tax) 73 on the 30th of July 2024, shedding light on the meaning of taxable income for the purpose of setting off the balance of an assessed loss by companies. This ruling aims to provide clear guidance on the limitation of set-off for companies under section 20(1)(a)(i) as amended by the Taxation Laws Amendment Act 20 of 2021.
National Treasury expressed its satisfaction as the President signed the Pension Funds Amendment Act (31 of 2024) into law, marking the final step in implementing the two-pot system set to begin on 1 September 2024. This act introduces crucial changes to various pension-related laws, including the Pension Funds Act of 1956 and the Government Employees Pension Law of 1996, essential for retirement funds, including public sector funds, to adopt the two-pot reform.
In April 2024, an automated process for Trust taxpayers was introduced on eFiling to electronically submit documentation to lodge a dispute via a fully guided process.
The Tax Chronology of South Africa: 1979–2024 provides a comprehensive overview of the current and historical rates for various taxes, duties, and levies collected by the South African Revenue Service (SARS). This publication covers the period from 1979 to 2024 and includes details on tax rates, duties, and levies.
As an employer, it’s essential to stay informed about your tax obligations. The Employer Annual Declaration period is a crucial time when you need to submit accurate information to the South African Revenue Service (SARS). Let’s dive into the details:
The Minister of Finance, Mr. Enoch Godongwana, tabled his budget review on 21st February 2024. While tax revenue performed well in 2021/22 and 2022/23 due to high commodity prices, revenue for 2023/24 is now expected to fall short by R56.1 billion. Government has proposed tax increases totalling R15 billion in 2024/25 to alleviate immediate fiscal pressures, while limiting the impact on economic growth. The following were the key tax proposals:
SARS’ aim is to record all beneficial owners of registered Trusts in order to comply with the Financial Action Task Force (FATF) requirements. In this regard, certain information must be submitted via e-Filing. These documents may include, but are not necessarily limited to, the following:
The minister of finance will table his budget proposals on February 28th, 2024.Some of the key predictions on the back of an election year are as follows:
VAT enhancements for estimated assessments are changes to the VAT Act and the Tax Administration Act that affect how SARS can issue estimated assessments for VAT vendors who do not submit their returns or supporting documents on time. These changes aim to improve compliance and reduce tax evasion.
CIPC (Companies and Intellectual Property Commission) is an agency that regulates the registration and compliance of companies and intellectual property. One of its functions is to keep a register of beneficial ownership (BO) for companies and close corporations.
Electricity Minister Kgosientsho Ramokgopa has stated that his department is advocating for the tax incentive for solar PV to be extended to batteries and inverters¹. The government wants more businesses and households to opt for rooftop solar, and efforts are under way to push for a tax incentive to be extended to inverters and batteries part of solar PV systems.
The Medium-Term Budget Policy Statement (MTBPS) presented by Minister Enoch Godongwana on 1 November 2023 outlined several key reforms aimed at delivering growth over the medium term:
The Medium-Term Budget Policy Statement (MTBPS) for 2023 was unveiled by Finance Minister Enoch Godongwana on 1 November 2023. The MTBPS, also referred to as the "mini-budget", allows government departments to apply for adjustments to their budgets, apply for rollovers, and request additional funds for unforeseeable and unavoidable expenditures. It sets government policy goals and priorities, forecasts the macroeconomic trajectory, and projects the fiscal framework over the next three years by outlining spending and revenue estimates.
Extract from an article by Lucinda Steenkamp, senior legal advisor CIPC.
Finance Minister Pravin Gordhan has unveiled a sweeping plan to overhaul the governance and management of state-owned companies, which he said have been plagued by corruption, inefficiency and poor performance. The plan, which was announced in his medium-term budget policy statement on Wednesday, aims to restore the financial viability and strategic relevance of the entities, which collectively have more than R1 trillion in assets and employ over 300 000 people.
