The recent medium-term budget confirmed changes to tax proposals and included several financial sector announcements linked to exchange control and retirement reforms.
By Tracy Muller – Head of Fiduciary Advice at Nedbank Private Bank
01 December 2020
In our October newsletter, we discussed two draft tax bills that could possibly affect you, namely the 2020 Draft Taxation Laws Amendment Bill and the 2020 Draft Tax Administration Laws Amendment Bill.
Click here for a reminder of the proposed changes. The final bills were tabled as part of the Medium-Term Budget Policy Statement (MTBPS) in October. There are two changes between the drafts and the final bills that we would like to highlight as follows:
In the National Budget in February the Finance Minister announced far-reaching reforms to modernise the capital flow management framework to support the growth of South Africa as an investment and financial hub for Africa. These reforms will result in the phasing out of current exchange control regulations. In the meantime, our government will be accelerating several measures to make it easier to invest in South Africa. Click here for a summary of proposed exchange control reforms.
Enhance South Africa as a gateway into the rest of Africa
Treasury is engaging with industry associations and other stakeholders to strengthen specific mechanisms to enhance South Africa’s role as a gateway into the rest of Africa, including the listing of non-rand denominated instruments, collateral for derivative exposures, and possible mechanisms to enable financial services providers and asset managers to manage collective investment schemes of foreign assets from South Africa. A regulatory task team of key regulators, including the Prudential Authority, Financial Sector Conduct Authority, Financial Intelligence Centre and SARS, will be engaging intensively with stakeholders to finalise proposals for possible announcement on Budget Day. We will be monitoring developments closely with Nedgroup Investments via the Association for Saving and Investments South Africa and the Banking Association South Africa.
Our fiduciary experts pay close attention to developments in industry regulations and changes in legislation and work closely with your wealth manager, who can provide you with personal advice for your specific situation.
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