In August 2020, we reported (click here) on the proposed amendments to the 2020 Draft Taxation Laws Amendment Bill ("TLAB") and the 2020 Draft Tax Administration Laws Amendment Bill ("TALAB") that would have adverse and unintended consequences for mining companies, such as excluding not just contract miners but also mining companies that do not hold mining rights (for example, Unincorporated Joint Ventures) from being able to claim the accelerated capital expenditure allowance.
After extensive consultation with National Treasury, in which we actively participated together with our clients and the Minerals Council, National Treasury has agreed to postpone the proposed amendments to allow for more investigation and detailed consultation with the mining industry and related stakeholders before any changes to the legislation are made.
This is a positive outcome for the mining industry and helps create policy and legal certainty for an industry that is in desperate need to attract foreign and local investment and in turn boost the South African economy during and post the COVID-19 period.
However, the battle is not over yet, and it is imperative for all taxpayers involved in the mining industry to actively participate in these forthcoming consultations with National Treasury and the South African Revenue Service ("SARS") to ensure a favourable outcome for all stakeholders, industry and government.
Given our extensive engagement with National Treasury and SARS in addressing these issues so far, we would be happy to assist you with your participation in these important upcoming consultations.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
