PwC Tax Services*, South Africa Portfolio Committee on Finance Budget 2009 Tax Proposals – Initial Comment 16 February 2009 *connectedthinking PricewaterhouseCoopers

2009 Tax proposals The tax systems and economic growth Contents

Budget Proposals – Initial assessment GENERAL No major changes proposed – Welcomed! Correction of technicalities, unintended consequences must be the focus for 2009

Budget Proposals – Initial assessment SPECIFIC COMMENTS Provisional tax 2nd payment – Dissatisfaction remains Compound interest on late payment of tax Interest is already non-tax deductible New Dividends Tax and change-over from STC VAT – Place of supply rules

The SA Tax system and Economic growth World-class sophistication Deductibility of interest on share acquisitions Administration Shortened filing season, Provisional tax, STC-DT transition Future of exchange control

PwC Tax Services*, South Africa Thank you Portfolio Committee on Finance Budget 2009 Tax Proposals – Initial Comment 16 February 2009 *connectedthinking PricewaterhouseCoopers