1. LEGISLATION AMENDMENTS

2. CHAIN OF EVENTS AMENDMENTS PROPOSED
JUNE TO AUGUST 2011 – COMMENTS MADE
20 DECEMBER LEGISLATION SIGNED BY THE PRESIDENT
22 FEBRUARY 2012 – PROPOSAL ANNOUNCED BY THE HONOURABLE MINISTER OF FINANCE
13 MARCH 2012 – TECHNICAL AMENDMENTS PROPOSED BY NATIONAL TREASURY

3. RATES APPROVED BY PRESIDENT
DIVIDEND TAX AT 10% - SEE SECTION 64E, 64G AND 64H
INCLUSION RATE FOR CGT REMAINS AT 50%
STC CREDITS ARE VALID FOR 5 YEARS AFTER 1 APRIL 2012 – SEE SECTION 64J

4. 2012/2013 BUDGET PROPOSALS
CGT INCLUSION RATE FOR INDIVIDUALS AND SPECIAL TRUSTS 33,3%. FOR OTHER TRUSTS AND COMPANIES 66,6% WEF 1 MARCH 2012.
DIVIDENDS TAX NOW WILL BE 15% AND NOT 10%. SECTION 64E. WHAT ABOUT OTHER SECTIONS?

5. CONFUSION
CURRENTLY THE LAW REMAINS WHAT WAS SIGNED IN DECEMBER 2011
HOWEVER, THE PROPOSED CHANGES HAVE APRIL 2012 EFFECTIVE DATE BUT THESE ARE NOT LAW
THE QUESTION IS WHAT SHOULD BE FOLLOWED BY TAXPAYERS NOW?

6. EXAMPLE
MRS MDLALOSE OWNS A COMPANY AND IT SELLS ITS ASSET AND MAKE CAPITAL GAIN OF R
THE COMPANY WANTS TO DECLARE THE PROFIT ON SALE AS A DIVIDEND

7. EXAMPLE CONT’D
IF THE COMPANY APPLIES THE LAW, IT WILL PAY TAX ON 14% OF R THE TAX WILL BE R42 000
AFTER PAYING TAX THE COMPANY WILL DISTRIBUTE TO MRS MDLALOSE R AND WITHHOLD DIVIDEND TAX OF R25 800
THEREFORE, MRS MDLALOSE WILL POCKET R

8. EXAMPLE CONT’D
WITH PROPOSED CHANGES MRS MDLALOSE WILL POCKET R
THE RETURN FOR MRS MDLOSE HAS DECREASED BY MORE THAN 10%
THOSE WHO APPLY THE LAW ARE PAYING LESS AND THOSE WHO DO NOT ARE PAYING MORE. WHAT SHOULD TAXPAYERS DO?

9. RECOMMENDATION
CHANGE EFFECTIVE DATE TO A FUTURE DATE SUCH AS 1 NOVEMBER 2012

10. QUESTIONS ? ?
Thank you
Q&A