Manuel Announces Tax Relief For South African Companies And Individuals

by Robert Lee, Tax-News.com, London

27 October 2005

Delivering the Medium-Term Budget Policy Statement in parliament on Tuesday, South African Finance Minister Trevor Manuel announced that individuals and companies can expect to benefit from tax relief in the upcoming budget, and assured investors in the mining sector that tax issues related to mineral xtraction will be clarified.

Mr Manuel told parliament that the 2006 budget will adjust thresholds for income tax, transfer duties and the graduated rate structure of small companies in line with inflation. He also announced that tax policy measures will be introduced to relax the exemption criteria for offshore banking activities.

Other measures proposed by the Finance Minister in the policy statement included revisions to medical scheme contributions to provide greater tax relief for low income taxpayers, and a commitment to make conservation donations tax deductible. In addition, the government is considering tax reforms in the area of retirement funds.

Meanwhile, the National Treasury acknowledged in the policy statement it is "keenly aware" that clarification of the revised Mineral and Petroleum Royalty Bill is important for investor certainty, and announced that the Bill would be released for comment some time in 2006.

"Some complex issues with regard to existing mineral rights holders and a possible review of certain income tax issues related to the mining sector require attention," the Treasury confirmed.

The full text of the Medium Term Budget Policy Statement Speech can be found in the Tax News Resources section.

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