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SAIPA Your Law : V olume 11 Issue 12,

25 July 2016

Page 2

Index

Financial

01. Financial Intelligence Centre Act: Amendment Bill 2015 Part 3 (Risk Management and Compliance

Programme)

Information

02. Public Service Act: Draft Public Service Act Regulations

Tax

03. Income Tax Act: Draft Tax Administration Laws Amendment Bill 2016

04. Income Tax Act: Draft Taxation Laws Amendment Bill 2016

05. Tax Administration Act: Draft Tax Administration Laws Amendment Bill 2016

General

6. Notable one liners

Page 3

Financial

01. Financial Intelligence Centre Act: Amendment Bill Part 3 (Risk

Management and Compliance Programme)

In part 1 the focus was on money laundering and terrorist financing proposed requirements that would specifically

affect directors. Part 2 considered the proposed customer due diligence requirements.

In this part the attention shifts to the Risk Management and Compliance Programme requirements that will be

required from each accountable institution.

Part 4, to be considered in a later newsletter, will focus on the proposed financial sanction requirements.

GENERAL REQUIREMENTS

In terms of the Bill each accountable institution must develop, document, maintain and implement a programme

for anti-money laundering and counter-terrorist financing risk management and compliance.

This risk management and compliance programme (Programme) must enable the institution to:

(i) Identify the risk that the provision by the institution of products or services may involve or

facilitate money laundering activities or the financing of terrorist and related activities;

(ii) Assess that risk;

(iii) Monitor that risk;

(iv) Mitigate that risk; and

(v) Manage that risk.

Existing and prospective clients

The Programme must also provide for the manner in which the institution determines if a person is:

(i) A prospective client in the process of establishing a business relationship with the institution; or

(ii) A client who has established a business relationship or entered into a single transaction.

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Anonymous clients, false or fictitious names

Provision must be made for the manner in which the institution complies with section 20A which prohibits an

accountable institution from establishing a business relationship or concluding a single transaction with an

anonymous client or a client with an apparent false or fictitious name.

Identification

Sections 21 and 21A, as amended by the Bill, require an accountable institution to establish and verify certain

information (see part 2) in the course of concluding a single transaction or establishing a business relationship

with a prospective client.

The Programme of an institution must make provision for the manner in which and the processes by which the

establishment and verification of identity of such persons is performed in the institution.

Provision must also be made for the manner in which the institution determine whether future transactions that

will be performed in the course of a business relationship are consistent with the institution’s knowledge of a

prospective client.

Legal persons, trusts and partnerships

If a prospective client is a legal person or is a natural person acting on behalf of a partnership, trust or similar

arrangement between natural persons, further additional due diligence measures will be required by the newly

inserted section 21B (see part 2).

An accountable institution will have to set out in its Programme the manner in which and the processes by which

it conducts additional due diligence measures in respect of legal persons, trusts and partnerships.

Ongoing due diligence

The new section 21C to be inserted requires an accountable institution to conduct ongoing due diligence in

respect of a business relationship (see part 2).

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Provision has to be made in the Programme for:

(i) The manner in which and the process by which ongoing due diligence and account monitoring in

respect of business relationships is conducted by the institution;

(ii) The manner in which the examining of complex or unusually large transactions, is done by the

institution;

(iii) The manner in which the examining of unusual patterns of transactions that have no apparent

business or lawful purpose is done by the institution; and

(iv) How the institution keeps written findings relating to complex or unusually large transactions and

unusual patterns of transactions.

Doubts about previously obtained information

A new section deals with what an accountable institution must do, if subsequent to establishing a business

relationship or entering into a single transaction, it doubts the veracity or adequacy of previously obtained

information which it is required to verify (see part 2).

The programme of an institution will have to set out the manner in which and the processes by which the institution

will confirm information relating to a client when it has doubts about the veracity of previously obtained information.

Suspicious and unusual transactions.

The Programme of an accountable institution must provide for the manner in which and the processes by which

the institution will perform the customer due diligence requirements in accordance

with section 21, 21A, 21B and 21C when, during the course of a business relationship, it suspects that a

transaction or activity is suspicious or unusual as contemplated in section 29.

Inability to conduct customer due diligence

The Bill inserts a new section 21E which requires an accountable institution to terminate an existing business

relationship with a client if it is unable to:

(i) Establish and verify the identity of a client or other relevant person in accordance

with sections 21 or 21B;

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(ii) Obtain the information contemplated in section 21A; or

(iii) Conduct ongoing due diligence as contemplated in section 21C.

The manner in which the institution will terminate an existing business relationship under these circumstances

must be set out in the institution’s Programme.

Foreign prominent public officials and domestic prominent influential persons

In keeping with international financial sector requirements a greater extent of due diligence is required:

(i) By the new section 21F inserted by the Bill in respect of foreign prominent public officials (see part 2);

and

(ii) By a new section 21G in respect of domestic prominent influential persons (see part 2); and

(iii) By a new section 21H in respect of family members and known close associates of such foreign or

domestic prominent persons.

The programme of an accountable institution must provide for the manner in which and the processes by which

the institution determines whether a client is a foreign prominent public official or a domestic prominent influential

person.

Risk differentiation

An accountable institution must in its Programme provide for the manner in which and the processes by which

enhanced due diligence is conducted for higher-risk business relationships and when simplified customer due

diligence might be permitted in the institution.

RECORD KEEPING

The Programme must provide for the manner in which and the place at which records are kept in terms of Part

2 of Chapter 3.

Customer due diligence records

The new requirements under section 22 will be that an accountable institution will have to keep a record of

information it is required to obtain pursuant to sections 21 to 21H pertaining to a client or prospective client.

Page 7

Without limiting this general requirement, the records must:

(i) Include copies of, or references to, information provided to or obtained by the institution to verify a

person’s identity; and

(ii) In the case of a business relationship, reflect the information obtained by the institution under section

21A concerning:

The nature of the business relationship;

The intended purpose of the business relationship; and

The source of funds which the prospective client is expected to use in concluding transactions

in the course of the business relationship.

Transaction records

The new section 22A will require an accountable institution to keep a record of every transaction as is reasonably

necessary to enable that transaction to be readily constructed. This requirement applies to a single transaction

as well as to a transaction concluded in the course of a business relationship which that institution has with the

client.

Without limiting the generality of this requirement, the following information must be reflected in the records:

(i) The amount involved and the currency in which it was denominated;

(ii) The date on which the transaction was concluded;

(iii) The parties to the transaction;

(iv) The nature of the transaction;

(v) Business correspondence; and

(vi) If the accountable institution provides account facilities to its clients, the identifying particulars of all

accounts and the account files at the institution that are related to the transaction.

Period for keeping records

Records which relate to the establishment of a business relationship must be kept for at least 5 years from the

date on which the business relationship is terminated.

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Records relating to a transaction (whether a single transaction or one concluded in the cause of a business

relationship) have to be kept for at least 5 years from the date on which that transaction is concluded.

Records relating to a transaction or activity which gave rise to a report of suspicious or unusual transactions in

terms of section 29 must be kept for at least 5 years from the date on which the report was submitted to the

Financial Intelligence Centre.

Form of record keeping

Records may be kept in electronic form and must be capable of being reproduced in a legible document.

The record keeping duties of an accountable institution may be performed by a third party on behalf of that

institution, subject to the following requirements:

(i) The accountable institution must have free and easy access to the records; and

(ii) The records must be readily available to the Financial Intelligence Centre and the relevant supervisory

body for the purposes of performing its functions in terms of the Act.

If such a third party fails to properly comply with its recordkeeping duties on behalf of the accountable institution

concerned, the institution will be liable for that failure.

When an institution appoints a third party to perform its recordkeeping duties it must forthwith provide the Financial

Intelligence Centre and the supervising body concerned with the prescribed particulars regarding the third party.

REPORTS TO THE CENTRE

The Risk Management and Compliance Programme which an accountable institution must compile will have to:

(i) Enable the institution to determine when a transaction or activity is reportable to the Financial

Intelligence Centre under Part 3 of Chapter 3 of the Act; and

(ii) Provide for the processes for reporting information to the Centre under Part 3 of Chapter 3.

Page 9

Suspicious and unusual transactions

An accountable institution is subject to section 29, which requires reports to be made by a person who:

(i) Carries on a business (which would include an accountable institution);

(ii) Manages a business; or

(iii) Is employed by a business.

Such a person is required to make a report to the Financial Intelligence Centre if he or she knows or ought

reasonably to have known or suspected any of the following:

(i) The business has received or is about to receive the proceeds of unlawful activities or property which

is connected to an offence relating to the financing of terrorist and related activities;

(ii) A transaction or series of transactions to which the business is a party:

Facilitated or is likely to facilitate the transfers of the proceeds of unlawful activities or property

which is connected to an offence relating to the financing of terrorist and related activities;

Has no apparent business or lawful purpose;

Is conducted for the purpose of avoiding a reporting duty under the Act;

May be relevant to the investigation of an evasion or attempted evasion of a duty to pay any

tax, duty or levy imposed by legislation administered by the Commissioner for SARS;

Relates to an offence relating to the financing of terrorist and related activities; or

Relates to the contravention of a prohibition under section 26B;

(iii) The business has been used or is about to be used in any way for money laundering purposes or to

facilitate the commission of an offence relating to the financing of terrorist and related activities.

The person concerned must report to the Centre the grounds for the knowledge or suspicion and the prescribed

particulars concerning the transaction or series of transactions. This has to be done within the prescribed period

after the knowledge was acquired or the suspicion arose.

Where a transaction or transactions have not been concluded, a person who carries on; is in charge of; manages

or is employed by a business may have to make a report to the Centre. This will be required if that person knows

or suspects that a transaction or a series of transactions about which enquiries are made, may, if concluded, have

caused any of the consequences referred to in (i), (ii) or (iii) above.

Page 10

Secrecy regarding report

A person who made or must make a report in terms of section 29 is prohibited from disclosing that fact or any

information regarding the contents of any such report to any other person, including the person in respect of

whom the report is or must be made.

This prohibition does not apply if a copy of the report or facts or information relating to the report is demanded by

an inspector in terms of section 45B(2A).

The prohibition also extends to a person other than the one who makes the reports, if that other person knows

that a report has been or is to be made.

In both cases exceptions to the prohibition apply if the disclosure is made:

(i) Within the scope of the powers and duties of the person making the disclosure in terms of any

legislation;

(ii) For the purpose of carrying out the provisions of the FICA act;

(iii) For the purpose of legal proceedings, including any proceedings before a judge in chambers; or

(iv) In terms of an order of court.

Other provisions on reporting

Other provisions relating to reporting include:

(i) Section 31 which requires an accountable institution to report an electronic transfer into or out of South

Africa on behalf of another person of an amount in excess of a prescribed amount.

(ii) Section 32 which requires that reports must be made “in the prescribed manner”; and deals with the

furnishing of additional information.

(iii) Section 37 which provides that no duty or secrecy or confidentiality affects the reporting duties, except

for the right to legal professional privilege; and

(iv) Section 38 which deals with the protection of persons making reports.

Page 11

FOREIGN OPERATIONS

The requirements for the Risk and Compliance Programme of an accountable institution in respect of its branches,

subsidiaries or other operations in foreign countries are that provision must be made for:

(i) The manner in which the Programme is implemented in those foreign branches, subsidiaries or other

operations so as to enable the institution to comply with its obligations under this Act;

(ii) The manner in which the institution will determine if the host country of a foreign branch or subsidiary

permits the implementation of measures required under the Act; and

(iii) The manner in which the institution will inform the Financial Intelligence Centre and supervisory body

concerned if the host country does not permit the implementation of measures required under the Act.

IMPLEMENTATION

The Programme must also provide for the processes for the institution to implement its Risk Management and

Compliance Programme.

PRESCRIBED MATTERS

Provision must further be made for any matter prescribed by regulation.

NON-APPLICABILITY OF ELEMENTS

An accountable institution must indicate in its Risk Management and Compliance Programme if any of the content

requirements for a Programme is not applicable to that institution, and the reason why it is not applicable.

APPROVAL

The board of directors, senior management or other person or persons exercising the highest level of authority in

an accountable institution must approve the Programme of that institution.

REVIEW

An accountable institution must review its Programme at regular intervals to ensure that it remains relevant to the

operations of the institution and the achievement of the requirements set for it in the Act.

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DISSEMINATION

An accountable institution must make documentation describing its Risk Management and Compliance

Programme required for purposes of FICA available to each of its employees involved in transactions to which

this Act applies.

It must also, on request, make a copy available to:

(i) The Financial Intelligence Centre;

(ii) A supervisory body which performs regulatory or supervisory functions in respect of that institution.

Bill 33B of 2015 (Incorporated into the Financial Intelligence Centre Act and Regulations)

Back to index

Page 13

Information

02. Public Service Act: Draft Public Service Regulations

The Draft Public Service Regulations propose, amongst others:

(i) A limited definition of 'family member', and a panel of review where there a functionary may have a

conflict of interest;

(ii) A code of conduct that requires compliance with applicable laws, including the Prevention and

Combatting of Corrupt Activities Act;

(iii) That certain employees must disclose interests they hold (in equity, trusts, directorships,

sponsorships, gifts, cars etc);

(iv) That the head of a department must maintain a system that allows employees and citizens

to confidentially report unethical conduct;

(v) Assessments of the efficiency and effectiveness of a department, and maintaining information and

communication technology plans;

(vi) Feasibility studies before establishing a government component or service unit, and assessments of

organisation functionality;

(vii) Service delivery charters and improvement plans for each executive authority; and

(viii) Post-exposure prophylaxis for employees exposed due to occupational incident.

Reminder: The Constitutional public administration values and principles apply above any public administration

laws.

www.dpsa.gov.za/ GNR838 GG40141 / 15 July 2016 (Incorporated into the Public Service Act, Public

Administration Management Act and Regulations)

Back to index

Page 14

Tax

03. Income Tax Act: Draft Tax Administration Laws Amendment Bill

2016

The Draft Tax Administration Laws Amendment Bill 2016 (comment deadline 8 August 2016) proposes amending:

(i) Section 3 (Allow Financial Services Board to disclose income tax approval status of a fund to a third

party);

(ii) Section 64K (Exempt dividends tax return not needed for every dividend payment from a tax-free

investment);

(iii) Fourth Schedule:

Paragraph 1 (Notify local employees of foreign employers in SA that do not deduct PAYE, by

public notice that they are provisional taxpayers, and include certain dividends received from

restricted equity instruments taxable on assessment of the directors and employees in the

definition of remuneration for PAYE);

Paragraph 9 (Commencement of deduction tables do not need to be gazetted);

Paragraph 11C (Repeal requirement to pay PAYE by directors of private companies);

Paragraph 19 (4 month time limitation after year of assessment to apply to 2nd provisional tax

period estimate); and

Paragraph 20 (Include gross income paragraph (d) amounts (other than retirement fund lump

sum benefit, retirement fund lump sum withdrawal benefit or severance benefit) in calculation

of penalty, as taxpayers are not penalised if they fail to pay the required provisional tax); and

(iv) Making technical or stylistic corrections to sections 35A, section 102, Fourth Schedule paragraph 2,

10, 11A, and 28, and Seventh Schedule paragraph 3.

www.sars.gov.za (Incorporated into the Income Tax Act and Regulations)

Back to index

Page 15

Tax

04. Income Tax Act: Draft Taxation Laws Amendment Bill 2016

The Draft Taxation Laws Amendment Bill 2016 (comment deadline 8 August 2016) proposes amending section

1, 6, 6A, 6B, 7A, 9H, 10A, 12B, 13, 20, 30, 37D, 41, Second Schedule paragraph 1 and 4, (textual corrections,

stylistic amendments and reference updates).

The Draft Bill also proposes making substantive amendments to:

(i) Section 1 (gross income double taxation, gross income retirement funds, gross income government

grants, identical share, remuneration proxy, retirement annuity fund);

(ii) Section 5 (Determine tax rates chargeable for taxable income/ inception date at annual national

budget);

(iii) Section 6quat (Clarify that subsection (1C)(b) amounts are deducted from income, and any refunds

received or amounts discharged for such deductions should not be deemed to be an amount of normal

tax payable);

(iv) Section 7C (Measures to prevent interest free loans to transfer assets to trust that avoid estate

duty/donations tax);

(v) Section 8C and 8CA (Measures to prevent avoiding rules for employee based share incentive

schemes);

(vi) Section 8E and 8EA (Measures to prevent avoiding rules for third party backed shares);

(vii) Section 8F and 8FA (To provide for cross-border and subordination agreements in relation to hybrid

instruments);

(viii) Section 9 (Clarify section 9(2)(i) exclusion from SA source rule does not apply to lump sums or

retirement annuity fund annuities);

(ix) Section 9C, 23N and 25BB (REITS related amendments); and

(x) Section 9D, 10, and part 4C (Amongst others, undoing changes related to withholding tax on service

fees).

Page 16

The Draft Bill further proposes making substantive amendments to:

(i) Section 9HA (Clarify tax consequences for surviving spouse re allowable deductions and asset

allowances);

(ii) Section 10 (Tax exemption changes to prevent avoidance of employee based share incentive

schemes rules, increase thresholds for exemption of employer provided bursaries, and disallow (gC)(ii)

exemption for lump sum, pension, annuity from SA located retirement fund;

(iii) Section 10B (Clarify amounts paid out as annuities do not qualify for a foreign dividend exemption);

(iv) Section 11 (Extending the bad debt deduction rule to exchange differences arising on foreign

currency denominated loan, section 11(k) allowable deduction regarding contribution to pension fund,

provident fund or retirement annuity fund to be determined before section 18A allowable deduction for

certain donations, and allow set off against passive income of deductions for contributions to all retirement

funds);

(v Section 11D (Reopen prescribed RD deduction assessments delayed due to the processing of the

approval);

(vi) Section 12E (Extend small business corporation regime to personal liability companies);

(vii) Section 12I and 12J and 22 (Improve industrial policy projects, venture capital company, and outright

transfer of collateral regulation);

(viii) Section 12P (Exemption of amounts received or accrued in respect of local sphere government

grants);

(ix) Section 12R and 12S (Clarify tax rate applicable to small business corporations located in special

economic zones); and

(x) Section 12U (Additional deduction in respect of roads and fences in respect of production of

renewable energy).

Finally, the Draft Bill proposes making substantive amendments to:

(i) Section 13 quat (Allow additional municipalities to apply for the UDZ tax incentive);

(ii) Section 23M (Consider treaty protection and relief);

(iii) Section 23N (Clarify section does not apply to interests accrued to REITS, insurers, pension or

provident funds if requirements are met);

Page 17

(iv) Section 23O (Prevent a double reduction of tax attributes in respect of expenditure funded using

exempt funding from small business funding entities);

(v) Section 24J (Clarify interest definition paragraph (a) applies to finance charges of the same kind or

nature);

(vi) Section 24JB (Clarifies section does not apply to entities conducting treasury operations);

(vii) Section 25 (Clarify tax consequences for the surviving spouse regarding allowable deductions,

allowances and recoupments);

(viii) Section 29A (Long-term insurers taxation changes, including changing the tax valuation method);

(ix) Section 36 (Tax relief for mining companies spending on infrastructure for the benefit of mining

communities); and

(x) Other (section 42, 44, 50D, 50E, 50F, 50G, and 56, Sixth Schedule paragraph 1 and 7, Seventh

Schedule paragraph 2A,7, 9 and 12D, Eighth Schedule paragraph 11, 38, 43, 47, 49, 50, 64A, 64D, 66,

76B, and Ninth Schedule par 4).

www.sars.gov.za (Incorporated into the Income Tax Act and Regulations)

Back to index

Page 18

Tax

05. Tax Administration Act: Draft Tax Administration Laws

Amendment Bill 2016

The Draft Tax Administration Laws Amendment Bill 2016 (comment deadline 8 August 2016) proposes:

(i) Making stylistic, textual or SARS/Ombud specific amendments to sections

1, 11, 14, 15, 16, 20, 99, 118, 194, 226, and 270 and Schedule 1 item 189, and amending:

(ii) Section 69 (Allow FSB to disclose income tax approval status of a fund to a third party);

(iii) Section 97 (Record of assessment refers to the return and the supporting docs given to SARS for

verification or audit purposes, and may be destroyed after 7 years;

(iv) Section 100 (Clarify additional assessments after prescription only allowed in stated exceptional

events;

(v) Section 104 (Condonation of a late objection not based on exceptional circumstances may be

extended by SARS for a period up to 30 days);

(vi) Section 151 (Clarify SARS information gathering and other powers also apply to person under tax

offence criminal investigation);

(vii) Section 221 and 223 (Impermissible avoidance arrangement added as ground for understatement

penalty); and

(viii) Section 225 (Clarify pending audit/investigation, as voluntary disclosure relief not allowed if aware

of it).

www.sars.gov.za (Incorporated into the Tax Administration Act and Regulations)

Back to index

Page 19

General

06. Notable One Liners

Draft Carbon Tax Bill: The Draft Bill proposes taxing, from 1 January 2017, at a rate of R120 per tonne carbon

dioxide equivalent of the greenhouse gas emissions of a taxpayer that conducts an activity listed in a gazetted

declaration of greenhouse gases as priority air pollutants, with certain tax allowances to be given. The draft carbon

offset regulations propose what those allowances may be, their duration and their limitation (Comment deadline

29 July 2016).

Competition Act:

(i) A co-operation agreement to share information and manage shared jurisdictions has been entered into

between the Competition Commission and the Construction Industry Development Board .

(ii) The South African Petroleum Industry has applied for exemptions relating to agreements and

practices required to ensure continuity and stability of liquid fuels supply to various sectors and the

geographic locations of the SA economy, and received a temporary exemption until 30 September 2016.

(iii) The Western Cape Citrus Producers Forum has been granted a conditional exemption until 30

September 2016, and subject to conditions, relating to the coordination of logistical, marketing and sales

support for member growers that export citrus fruits to the USA.

(iv) The Abalone Farmers Association of SA has applied for an exemption for coordination activities

needed in certain markets (relating to meetings and communications, market intelligence and price

stability).

Consumer Protection Act : Draft best practices have been proposed for the motor industry (complaint

resolution, pre-authorised repairs and work, grey/ parallel parts, sub-contracting, goods examination,

retailer/supplier and original equipment manufacturer relationship, return acceptance, allowable deductions and

returns procedure) – Comment deadline 30 official (?) days from 11 July 2016.

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Customs and Excise Act:

(i) The Draft Taxation Laws Amendment Bill 2016 proposes introducing a general anti-avoidance

provision, and the continuation of certain schedules.

(ii) The Liquor Products Amendment Bill proposes repealing the definition of wine and spirit board, and

providing that the blending of brandy and the production from spirits of any other beverage or any other

non-excisable goods shall be subject to such supervision by an officer as the Commissioner may in each

case consider necessary.

(iii) The Draft Tax Administration Laws Amendment Bill 2016 proposes amending sections 21A, 35A, 76B,

76C, 105, and 113 (Comment deadline 8 August 2016).

(iv) New DA260 Excise Account forms apply from 24 February 2016 for other fermented beverages (SVM,

SOS, and OS), and for spirits products (VMS 110 day cycle, VMP 130 day cycle, and SOS).

Customs Control Act: The Draft Tax Administration Laws Amendment Bill proposes amending sections 1, 63, 91,

94, 194, 204, 308 576, 600, 626, 687 and 929, once the principal Act commences.

Customs Duty Act: The Draft Tax Administration Laws Amendment Bill proposes amending sections 95, 171, 172

and 175, once the principal Act commences.

Electronic Communications Act: Party election broadcasts during election broadcast period have been gazetted.

Estate Duty Act: The Draft Taxation Law Amendment Bill 2016 proposes additional documentation in support of

the unutilised abatement allowance between spouses for purposes of calculating the dutiable amount of an estate,

and determining the estate duty rate at the annual national budget.

Financial Sector Regulation Bill : Revised comments, for consideration by the Standing Committee on Finance,

have been published - These comments will only be reflected in www.gazette.co.za to the extent that they are

later incorporated into a new official version of the Bill or in a final Act itself.

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Income Tax Act : Version 3 of the Draft Rates and Monetary Amounts and Amendment of Revenue Laws Bill

2016 proposes amending sections 5, 6, 6A, 9D, 29A, 29B, Seventh Schedule paragraph 9 and Eighth

Schedule paragraph 5 and 10 (Comment deadline 8 August 2016) - the proposed increase in the annual CGT

exclusion of a natural person and a special trust, to R40 000, is new.

Independent Communications Authority of South Africa Act : ICASA has launched an inquiry into subscription

TV broadcasting services to determine competitiveness as a number of recent licences granted faced

sustainability issues or did not commence.

Labour Relations Act: The essential services committee regulations were repealed on 8 July 2016 (in terms of

GN R817 GG40128 / 8 July 2016), and transitional provisions have been introduced for the previous labour

relations general regulations.

Liquor Act 1989: The Liquor Products Amendment Bill 2016 proposes amending the definitions of alcoholic fruit

beverage, beer and sorghum beer to reflect the definitions proposed for other fermented beverages, beer and

traditional African beer in the Liquor Products Act.

Liquor Act 2003: The Liquor Products Amendment Bill proposes removing references to beer and traditional

African beer, as these will be included in the definition of a liquor product under the Liquor Products Act.

Liquor Products Act : The Liquor Products Amendment Bill 2016 proposes, amongst others, that beer, African

beer, fermented beverages be defined and regulated as liquor products (including what they may contain, how

they are flavoured and how they are produced), regulation by a Wine Certification Authority, selling a product with

alcohol content above 0.5% only if it is a liquor product or exempted, ‘other fermented beverages’ to replace

sacramental beverages/fermentation of oranges or honey, import and export certificates for products (incl beer)

with alcohol content 0.5%, and acknowledging legal rights in the offences section regarding providing information

in certain instances, and compulsory registration of persons as producers, blenders or fillers of liquor products.

Note: Entities that suddenly find themselves regulated will need to be advised on also considering related laws,

Page 22

such as the Customs and Excise Act provision regarding beer that contains a higher alcoholic strength than

registered.

Mental Health Care Act: The Mental Health Care Amendment Act 2014 repealed the Mental Health Act 1973, and

provided for delegation of powers, on 1 July 2016.

Mine Health and Safety Act : Mandatory codes have been gazetted relating to risk based emergency care on

a mine (to avoid complications if care not given timeously), and to threshold shift in the medical surveillance of

noise induced hearing loss (noise exposure measurement, management and reporting guideline based on best

practice and latest expertise and technology).

Mineral and Petroleum Resources Royalty Act: The Draft Taxation Laws Amendment Bill 2016

proposes determining the royalties percentage at the annual national budget.

Mineral and Petroleum Resources Royalty Administration Act: The Draft Tax Administration Laws Amendment

Bill 2016 proposes amending sections 1, 5, 5A, 6, 6A, 8, part 4, 14, 15, 16, 18A, and 19 (Comment deadline 8

August 2016).

National Environmental Management Act :

(i) The registration authority regulations will commence once the first registration authority is appointed

(2 years after in the case of the requirement of a practitioner to register), and state what tasks may only

be performed by a registered environmental assessment practitioner. Note: Regulatory uncertainty has

been created as the commencement of the registration requirements are linked to when the first

registration authority starts.

(ii) Clarification has been gazetted as to who is the competent authority for certain environmental

authorisation applications for renewable energy.

(iii) A draft generic environmental management programmes for overhead powerline construction /

substation construction is theoretically available from the Department of Environmental Affairs (Comment

deadline 30 days from 1 July 2016).

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National Environmental Management Integrated Coastal Management Act: The manner in which an appeal

against a coastal authorisation decision of the Minister or a MEC may be submitted, processed, considered and

decided on have been gazetted - the right to appeal may later be extended to coastal protection and access

decisions, and decisions to repair or remove structures.

National Forests Act: The National Forests Amendment Bill proposes, amongst others, that government is the

public trustee of the nation's forestry resources; that a licence or exemption is needed to cut, disturb, damage or

destroy natural forest indigenous vegetation; that a licence may be given in exceptional circumstances to conduct

activity in protected area inconsistent with objectives of area; that a valid contract or legislation authority is needed

for a prospecting or mining activity in a State forest; and that penalties and offences related to forest use, forest

and tree protection and sustainable forest management should be increased.

National Heritage Resources Act: The South African National Memorial Delville Wood has been declared a

national heritage site, which means prohibitions on damage, removals or alterations and possible protections

relating to access and use control.

National Land Transport Act: From 29 July 2016 the National Public Transport Regulator will accredit operators

of tourist transport services, and decide on applications for the granting, renewal, amendment or transfer of

operating licences for tourist transport services.

National Water Act: A draft policy on sustainable hydropower generation (that considers run-off-river projects to

retrofitted dams) has been gazetted (Comment deadline 60 days from 15 July 2016).

Preferential Procurement Policy Framework Act: Telkom has been exempted from the application of the Act.

Public Finance Management Act: Telkom has been further exempted from various sections and regulations of

the Act until Telkom SA Soc. Limited comes under the ownership control of the national executive, or the date

that Telkom SA. Soc. Limited is de-listed from the JSE.

Public Holidays Act: 3 August 2016 has been declared a national public holiday.

Page 24

Rates and Monetary Amounts and Amendment of Revenue Laws:

(i) The Draft Rates and Monetary Amounts and Amendment of Revenue Laws Bill 2016 version

3 proposes making amendments to income tax rates, transfer duty rates, and customs and excise duties

(Comment deadline 8 August 2016).

(ii) Version 3 of the Draft Rates and Monetary Amounts and Amendment of Revenue Laws Bill 2016 has

made additional voluntary disclosure relief proposals (Comment deadline 8 August 2016).

Securities Transfer tax Act: The Draft Taxation Laws Amendment Bill 2016 proposes redefining collateral

arrangement, and determining the securities transfer tax rate at the annual national budget.

Skills Development Levies Act: The Draft Taxation Laws Amendment Bill 2016 proposes that the Minister may

determine the skills development levy rate and inception date of a new levy rate at the annual national budget.

South African National Roads Agency and National Roads Act : The PMB Amendment Bill proposes that a toll

road declaration requires provincial authority majority approval and availability of an alternative route of

comparable distance, environmental impact assessment, Premier and Municipal Council consultation.

Tax Administration Act : Disclosure rights in terms of the Act have been given to the National Student Financial

Aid Scheme, in addition to the Department of Home Affairs, Government Pensions Administrations Agency,

CIPC and municipalities - you may also wish to consider the past overview.

Transfer Duty Act: The Draft Taxation Laws Amendment Bill 2016 proposes determining the transfer duty rates at

the annual national budget.

Unemployment Insurance Contributions Act: The Draft Taxation Laws Amendment Bill 2016 proposes that

the Minister may determine the contribution percentage and inception date of a new contribution percentage at

the annual national budget.

Page 25

Value-added Tax Act :

(i) The Draft Tax Administration Laws Amendment Bill 2016 proposes making technical or stylistic

corrections to sections 1, 8, 11, 18, 55, and 86A, as well as schedule 1 and amending sections

16 (clarity on considerations before accepting, as a last resort, alternative documentary proof where

recipient vendors were issued with defective documents or unable to get documents), and 44 (Instances

where input tax deduction limited to tax period of time of supply, and clarify refund time limit) -Comment

deadline 8 August 2016.

(ii) The Draft Taxation Laws Amendment Bill 2016 proposes amending sections 1 (amendment of gold

part of second hand goods definition), 7 (Minister may determine VAT rate and inception date at the

annual national budget), 15 (Allow municipal entities to account for VAT on payment basis where the

supply is R100 000 or more), 77 (textual correction) and schedule 1(VAT exemption for imported goods

that are lost, destroyed or damaged through natural disasters) - Comment deadline 8 August 2016.

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