Gordhan concedes tax law changes will be costly
Cape Town – Finance Minister Pravin Gordhan conceded that the last-minute proposal to amend the tax changes will be very costly for businesses and will need to be finalised quickly.
“There must be certainty for the industry and employers/employees for what will happen on and after 1 March 2016, as systems need to be changed which is very costly,” Gordhan said in a document dated February 16 and sent to industry members.
President Jacob Zuma’s government was forced to backpedal on provisions in the Tax Amendment Act that compel South Africans to put two-thirds of their provident fund savings in a retirement annuity.
This followed a threat from the Congress of SA Trade Unions to pull their support of the African National Congress ahead of the local government elections this year.
The tax provision meant that retirees would be allowed to take only one-third in cash, while they are currently entitled to the full amount.