SARS issues guidelines on learnership relief

Business Day notes this follows government’s intention set out in Finance Minister Trevor Manual’s Budget speech last year to encourage business to participate in its skills development programme. Manuel announced at the time that the learnership allowance – which was due to expire in October – would be extended to October 2011. In addition, a more favourable tax allowance is to be provided for learnership agreements entered into with disabled individuals. Full Business Day report

More news from SARS is that it has embarked on a fundamental review of the operating systems and business processes of its tax and customs administration, with a view to modernising them. According to a Business Day report, international consulting firm Accenture has been brought in to determine what is needed to ensure the tax collection authority keeps pace with the growing demands of a broadening tax base and higher expectations with regard to service. SARS communications GM Logan Wort said the initial phase of the modernisation project would last about three months, cost about R300 000, and involve the design of the overall architecture of the project. Full Business Day report

Experts remain concerned, though, about anti-avoidance rules, which a Business Day report describes as among the most controversial changes that SARS introduced to SA’s tax laws last year. It notes that under the new general anti-avoidance rules, commonly referred to as ‘GAAR’, the Receiver brought in far-reaching taxing powers to scrutinise all commercial transactions and decide whether to tax them. Tax experts have since described the country’s taxation system as having experienced ‘a quantum leap in complexity’ since the introduction of the worldwide basis for taxation and capital gains tax. ‘The introduction of complex tax legislation has resulted in loopholes, more sophisticated tax planning and, inevitably, more anti-avoidance provisions,’ says Ernie Lai King, head of Deneys Reitz Tax Services. How far will this spiral continue? Will SA eventually end up with a tax system which is as cumbersome as that of the US? And what happened to the call for simplifying SA’s tax system made by President Thabo Mbeki, among others? These are just some of the questions tax fundis are asking, the report notes. Full Business Day report