Despite renewed optimism about South Africa’s political and economic outlook, the 2018 budget was a taxing affair.
At this point, you are probably suffering from some initial depression about a VAT rate hike to 15%. (Not to worry, I’m reliably informed it is already on Cosatu’s agenda.) Or you may be slightly relieved about limited personal income tax hikes.
However, if you consider topics such as contingency reserves and fiscal consolidation only for the sleep-deprived, here are some weird and wonderful facts Moneyweb came across while in lock-up on Wednesday.
(Yes, what can I say, they confiscated our mobile phones…)
Warning: If you already suffer from a sense of humour failure, this would be your cue to stop reading.
- At 870-pages, the 2018 Budget Estimates of National Expenditure is a lengthy document. While taxpayers will struggle to find some relief in those tables, hardened insomniacs may well do.
- Like most bitcoin enthusiasts, regulators may have joined the party a bit late. Finance minister Malusi Gigaba said Treasury was working with the Reserve Bank, Financial Services Board and other government entities towards a regulatory framework for all types of fintech. “For instance, the emergence of cryptocurrencies is a major development to which our regulatory regime must respond.”
- South Africa is ranked first in the most recent 2017 Open Budget Survey, together with New Zealand. Maybe the Boks should change their name to the Evergreens so they too can catch up with the All Blacks…
- The South African Revenue Service (Sars) will release a discussion paper on the potential use of electronic fiscal devices, sometimes known as electronic cash registers, to help revenue administration by monitoring business transactions.
- The CEO Initiative, through its partnership with other stakeholders, has established a business-led fund committing about R1.4 billion to support high potential SMMEs.
- Government plans to update the VAT Act so that only brown bread and whole-wheat brown bread will be zero-rated from April 1. “Products such as rye or low GI bread, which in South Africa are much more expensive and tend to be consumed by richer households, will not be zero-rated.” Now I’m no cook, but there might be something wrong with your bread recipe if it requires taxes to enhance the taste….
- The Competition Commission’s probe into data prices will be completed by the end of August 2018. (Hopefully I’ll have my phone back by then!)
- Sars has received over 2 000 applications to regularise tax affairs under its Special Voluntary Disclosure Programme (SVDP). Treasury expects that it would collect roughly R3 billion by the end of March 2018.
- It seems that government will incorporate some of the Davis Tax Committee’s recommendations about tax administration in draft legislation, in particular the president’s unrestricted ability to appoint the Sars commissioner. The DTC’s proposal came amid concerns about former president Jacob Zuma’s relationship with Commissioner Tom Moyane.
- A property audit conducted by the Department of Public Works shows that national government owns up to 195 000 properties, with an estimated value of over R40 billion. Government will introduce a programme to improve the use of these properties or to dispose of them in the short to medium term.
- Steinhoff was mentioned in the budget speech… for all the wrong reasons. “It is vital that we subject corporate corruption to the same amount of scrutiny and ensure, among others, that we implement the Irba recommendations on Mandatory Audit Firm Rotation (MAFR) in order to ensure the rigour of the audit process and independence of Audit Committees and Firms,” Gigaba said.
- Treasury has increased the offshore allocation limits for institutional investors by five percentage points. This includes the allocation to African investments, which will rise to 10%. (Happy Magnus?!)
Read more from the 2018 budget speech