Saara’s new tax plan ‘no surprise’

GOVERNMENT’S plan to introduce more taxes to make up for dwindling revenue resulting from economic pressure was expected by the private sector and didn’t hold any nasty surprises.

‘I don’t think one can find too much fault with what they want to change,’ Emile van Zyl, research director of Simonis Storm Securities, said on Friday.Finance Minister Saara Kuugongelwa-Amadhila on Thursday announced a comprehensive list of proposed tax amendments, including 15 changes to the Income Tax Act, seven changes to the Value-Added Tax Act, two changes to the Stamp Duties Act and five to the Transfer Duty Act. She will also introduce a new law on export levies.Van Zyl said most of her proposals have been in the pipeline for a long time. The weakening economy’s pressure on revenue sources has fast-tracked these tax reforms, he said.Van Zyl said the fact that Kuugongelwa-Amadhila has chosen not to tamper with royalties or tax on mining turnover, will bode well for investor confidence.’Even though [such changes] would have had more and a quicker impact [on revenue], it would probably not have been good for investor confidence, as investors don’t like when the rules changes the whole time,’ Van Zyl said.Instead, the minister intends taxing the export of raw minerals, among others, as well as any transaction in which a license holder wants to sell his exploration or mining right of natural resources.Kuugongelwa-Amadhila furthermore intends increasing non-diamond mining tax from 37,5 per cent to 44 per cent.Van Zyl said this increase is unlikely to boost state coffers immediately as there remains a host of items these companies can still deduct from their tax.Kuugongelwa-Amadhila’s intended amendments is a ‘definite effort to broaden the tax basis’, he said.* Due to technical problems, the full list of proposed tax amendments could not be published today. It will appear in Bottomline tomorrow.