Dear Sir/ Madam
INVITING PROPOSALS FOR MISCELLANEOUS TAX LAW CHANGES
I. Background
National Treasury issues a Budget Review every February as part of the annual Budget cycle. Among other items, the Budget Review contains announcements for all upcoming tax legislation. Major tax announcements are typically contained in Chapter 4 (with a shift to Chapter 5 in 2010). Miscellaneous that address unintended anomalies and loopholes are contained in Annexure C.
In order to facilitate the process of obtaining proposals for Annexure C, National Treasury would like to offer your organisation the opportunity to provide proposals for possible inclusion in Annexure C for the 2011/2012 Budget cycle. We are interested in miscellaneous tax proposals relating to all existing tax legislation – not just the Income Tax Act.
II. Criteria
The decision to proceed with miscellaneous tax proposals depends on a variety of factors. Proposed Annexure C changes must fit within the current tax policy paradigm (versus new policy directions). Moreover, potential revenue considerations must be considered; Annexure C proposals are not intended to have a significant revenue impact. It should further be emphasised that the timeframe for tax legislation remains tight so only critical matters will be considered with each matter being prioritised against other legislative tax proposals.
III. Format
Please submit your proposals in the required format so that we can properly assess their merits and importance vis-à-vis other proposals. More specifically, each proposal should contain: (i) the legal nature of the problem, (ii) a “detailed” factual description of the relevant transaction (very important!), and (iii) the nature of the businesses impacted by the problem.
All proposals should be grouped in topic areas for ease of review. These groupings should be divided as follows: (i) income tax - individuals, employment and savings, (ii) income tax - domestic business, (iii) income tax – international, and (iv) other taxes (e.g. value-added tax as well as the mineral and petroleum royalty).
IV. Timing and workshop
Annexure C proposals should be submitted no later than 22 November 2011. It is important to stress that timely proposals are essential for proper consideration, to obtain Ministerial approval and to prepare the groundwork for timely inclusion within the 2011/2012 Budget cycle.
To facilitate the review process, it is intended workshops will be held on 28 (Business) and 29 (International) November 2011 after review of the submissions. The workshop(s) will serve to clarify issues raised in the written submissions and to assist in the prioritisation of issues.
Upon completion of the workshop, recommendations for Annexure C will be transmitted to the Minister for his consideration. Proposals falling within the proposed Annexure C list will then be subject to further refinement (and information queries) in preparation of legislative inclusion. It should be noted that the mere discussion of tax proposals before the Budget is no guarantee that the proposals discussed will eventually be included in the Budget Review. The final decision to include proposals is the prerogative of the Minister of Finance; this decision cannot be delegated to junior officials.
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Please do not hesitate to contact us should you have any queries. All correspondence should be directed to
or fax number 012 315 5516 and Adele Collins or fax number 012422 5195. You can also reach Nomfanelo Mpotulo at 012 315 5617 for any procedural queries.
Yours sincerely
KEITH ENGEL
CHIEF DIRECTOR: LEGISLATIVE TAX DESIGN
DATE: 07 NOVEMBER 2011