Manuel Announces One Year Extension For CGT Valuations

by Robert Lee, Tax-News.com, London

19 September 2003

South African Finance Minister Trevor Manuel has extended the deadline for the submission of property valuations for capital gains tax purposes until September 30, 2004, whilst also announcing that the mining royalties bill is unlikely to be ready until at least February next year.

The original deadline for CGT valuations was at the end of this month, but it has been decided to extend that period for a year due to a lack of valuers, and to changes in the market which have affected previously undertaken valuations. According to the Business Report news service, Mr Manuel took the decision to ensure a smooth transition period for the tax, which was introduced two years ago, and to ensure owner-occupiers receive the necessary exemptions.

Meanwhile, the Finance Minister indicated that the mining royalties bill is unlikely to go before parliament ahead of the 2004 budget in February, and additionally announced that it is doubtful that it will become effective until 2008, in order to allow the market to fully adjust to the transfer of new mining rights to the state.

The initial draft of the bill contained proposals to tax the profit from the sale of mining companies' final product at a rate ranging from 1% to 8%, with the higher end of this bracket likely to be levied on the diamond sector.

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