Amendment to tax law will inhibit saving, investment body warns
The Association for Savings and Investment SA says proposed changes to the Income Tax Act will undermine policy consistency and encourage withdrawals, among other things
An amendment to the Income Tax Act proposed by the Treasury would have a negative effect on saving in SA, the Association for Savings and Investment SA (Asisa) argued in parliament on Tuesday. "It will undermine policy consistency, negatively differentiate SA from collective investment scheme taxation in other jurisdictions, encourage withdrawals in favour of less regulated saving and promote externalisation to foreign collective investment schemes," Asisa deputy chairman Thabo Khojane said in a submission to parliament’s finance committee during public hearings on the draft Taxation Laws Amendment Bill. Currently the Income Tax Act does not define what constitutes an amount of a capital nature and the Treasury has proposed an amendment in the draft bill that all gains and losses derived from the disposal of financial instruments within 12 months of their acquisition in collective investment scheme portfolios be deemed to be income of a revenue nature. This will be taxed as ordinary...
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