The Minister of Finance and Economic Development presented the Budget for 2017-18 to the National Assembly on 6 February 2017. To improve administration efficiency and optimise revenue collection, the income tax act and the value added tax act will be simplified by the development of the tax administration act which will be completed in the 2017/2018 financial year.
The government is planning to impose penalties under the income tax law for non-filers, irrespective of whether tax is payable, and the inclusion of the sale of property by the deputy sheriff as a taxable supply for VAT purposes. In addition, the government is proposing to introduce transfer pricing rules that would include thin capitalisation measures.
Special provisions allow for the set-off by individuals of farming losses against other income to the extent of 50% of other source chargeable income. Assessed losses from business can be carried forward for no more than five years, except for mining and prospecting losses, which can be carried forward indefinitely. Capital losses can be carried forward for one year only.
Corporate tax rates – resident company
The corporate tax rates for resident companies are to be the following:
- Approved manufacturing taxable income 15%;
- Capital gains 22%;
- Foreign dividends 15%;
- Mining taxable income (excluding diamonds) 22%-55%;
- Other taxable income 22%;
- Accredited Innovation Hub business taxable income 15%;
- IFSC company – approved services income 15%; and
- IFSC – other taxable income 22%.
The standard corporate tax rate of 30% is applicable for non-resident companies. Corporate tax is payable via the self-assessment system in quarterly SAT instalments on a financial year basis. Companies with annual income tax liabilities of less than P 50 000 may elect to make one payment within 4 months of end of the financial year. The Income Tax Return must be filed within four months of the company’s financial year end.
