South Africa has announced the tax proposals to form part of the budget review process as set out in the Budget 2023-24. These include the strengthening of the anti-tax avoidance rules, revenue raising and other tax proposals aimed at providing tax relief as follows:
- strengthening anti-tax avoidance rules dealing with third-party backed shares and rules relating to the definition of contributed tax capital and converting contributed tax capital from foreign currency to rands;
- clarifying anti-tax avoidance rules for low–interest or interest-free loans to trusts;
- apportioning the tax-free investment contribution limitation and limiting the retirement funds contributions deduction when an individual ceases to be a tax resident;
- refining the rules applicable to unbundling transactions;
- clarifying the interest limitation rules;
- clarifying the treatment of exchange gains and loses;
- refining the provisions dealing with the impact of International Financial Reporting Standard 17 insurance contracts on taxation of insurers;
- reviewing the Sharia-compliant financing arrangements;
- introducing ZAR 4 billion relief for individuals that install solar panels, and ZAR 5 billion to companies through the expansion of the renewable energy tax incentive;
- clarifying the interaction of the provisions on the acquisition of assets in exchange for shares;
- increasing excise duties on alcohol and tobacco in line with expected inflation of 4.9%;
- reviewing the value added tax (VAT) treatment of specific supplies in the short-term insurance industry;
- clarifying the VAT treatment of the prepaid vouchers in the telecommunications industry;
- extending the utilization period in the Carbon Offsets Regulations;
- aligning tax registration requirements for non-resident employers; and
- aligning with anti-money laundering and combating the financing of terrorism developments.
The Minister of Finance unveiled the 2023-24 National Budget on 22 February 2023.