The National Assembly (NA) has passed several Bills, including three money bills, at its hybrid plenary sitting today. The Rates and Monetary Amounts and Amendment of Revenue Laws Bill, the Taxation Laws Amendment Bill, and the Tax Administration Laws Amendment Bill were among the bills passed.
The Minister of Finance, Mr Enoch Godongwana, introduced the three bills in Parliament on 1 November 2023 when he presented the 2023 Medium-Term Budget Policy Statement.
The Rates and Monetary Amounts and Amendment of Revenue Laws Bill and the Taxation Laws Amendment Bill aim to fix the rates of tax. They also propose to amend the Income Tax Act of 1962, amend rates of tax and monetary amounts, amend the Customs and Excise Act of 1964, amend rates of duty in Schedule 1 to that Act, insert new tariff items, delete tariff items, delete rebate items, insert rebate items, and amend the Value-Added Tax Act of 1991, the Mineral and Petroleum Resources Royalty Act of 2008, and the Carbon Tax Act of 2019, among other related matters.
In processing these bills, the Standing Committee on Finance held public hearings on 19 September 2023. The Committee received written and oral submissions from organisations, including British American Tobacco South Africa, the South African Sugar Association, the Research Unit on the Economics of Excisable Products, HEALA, South African Breweries, and the World Health Organization. After receiving inputs from stakeholders, the committee requested the National Treasury and SARS to respond to issues raised by stakeholders.
One of the proposals in the Rates Bill is to adjust tax tables and rebates to account for an estimated inflation rate of 4.9%. This means that the income thresholds and the tax rates at which individuals are taxed will be modified to reflect the increase in the general price level (inflation). The Bill also proposes to adjust medical tax credits to account for the estimated inflation of 4.9%. Medical tax credits are deductions that taxpayers can claim to offset the cost of medical scheme contributions. For the first two members of a medical scheme, the monthly tax credit will increase from R347 to R364. For additional members beyond the first two, the monthly tax credit will increase from R234 to R246.
Tax tables determine the tax rates applicable to different income levels, and rebates are deductions from the tax liability. The proposed adjustments aim to prevent "bracket creep" where individuals are pushed into higher tax brackets due to inflation, even if their real purchasing power hasn't increased. By adjusting tax tables, rebates, and other components, the government tries to maintain the fairness and effectiveness of the tax system.
After considering the three bills, the Standing Committee on Finance recommended that the House (NA) pass them with amendments.
Several other bills, including the Independent Municipal Demarcation Authority Bill, the South African Post Office SOC Ltd Amendment Bill, the Industry and Competition Companies Amendment Bill and the Competition on Companies Second Amendment Bill were also considered during today's sitting.
The Independent Municipal Demarcation Authority Bill:
The Independent Municipal Demarcation Authority Bill suggests various changes to the Municipal Demarcation Act of 1998 to tackle several demarcation-related issues. It aims to address the problem of non-viable municipal amalgamations by proposing amendments to the current legislation.
The Bill proposes the repeal and replacement of the Municipal Demarcation Act of 1998 to bring it in line with current demarcation board practices. This includes transferring the current Municipal Demarcation Board's functions from the Municipal Structure Act of 1998 to the new Bill.
The Bill recommends the creation of the Independent Demarcations Appeal Authority (IMDA) to replace the Municipal Demarcation Board. It also proposes that the IMDA Board may only determine or re-determine a municipal boundary every 10 years to minimise disruption and ensure stability, as the current timeframe is not sufficient to allow a municipality to establish itself and function properly.
The South African Post Office SOC Ltd Amendment Bill:
The South African Post Office SOC Ltd Amendment Bill proposes amendments to the South African Post Office SOC Ltd Act of 2011. The changes aim to expand the mandate of the South African Post Office (SAPO) to provide diversified and expanded services, extract value from infrastructure capacity and forge partnerships with other stakeholders. The Bill also suggests revising the current governance structure and addressing problematic provisions identified during the implementation of the SAPO Act. SAPO will serve as a logistics and e-commerce provider and partner for other e-commerce and logistics players, including SMMEs and informal traders.
Companies Amendment Bill:
The Companies Amendment Bill proposes amendments to the Companies Act, 2008 (Act No. 71 of 2008). The changes include redefining securities, inserting new definitions, clarifying when a Notice of Amendment of a Memorandum of Incorporation takes effect, and distinguishing when the right to access companies' records may be limited. The Bill also proposes provisions for the preparation, presentation, and voting on a company's remuneration policy and its remuneration report. It also provides for filing a copy of the annual financial statement. Furthermore, the Bill seeks to empower the court to validate the irregular creation, allotment, or issue of shares and to clarify how shares that are not fully paid are to be dealt with, amongst others.
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Companies Second Amendment Bill:
The Companies Second Amendment Bill proposes amendments to the Companies Act, 2008 (Act No. 71 of 2008). The Bill intends to amend the time bars for proceedings to recover any loss, damages, or costs for which a person may be held liable in terms of section 77 of the Companies Act. It also seeks to address the time bar for bringing an application to declare a person delinquent or under probation in terms of section 162(2) and (3) of the Companies Act and all matters connected therewith.
Having considered all committee reports, the NA adopted the reports, and the Bills will now be sent to the NCOP for concurrence.
