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—An irreverent newsletter designed to keep you up to date—

When A National Treasury Runs A National Airline Where is the Red Bull when you need it?

MONTHLY LISTING Latest Legislation & Legislative Material To Emerge Or To Be Found Since Issue #151

This is a free publication devoted to unearthing what is going on in the SA tax field. If it isn’t here, it never happened. Unless otherwise indicated (‘§’), every document listed is cumulatively included in the Tax Shock, Horror Database, which is available

monthly, quarterly or even individually on DVD by post for R250 a month inclusive of VAT at 14%. This is perhaps the only newsletter in the world with its own stylebook (also free), by Costa Divaris & Duncan McAllister (2014 ed):

http://www.bspseminars.co.za/BspStylebook.pdf

For an extraordinary collection of tax and tax-related acts, books, databases and newsletters by and compiled by Costa Divaris: http://www.bspseminars.co.za/BspSeminarsPublications.pdf

GN 868 GG 27636 30 May 2005: Local government: Municipal Finance Management Act, 2003—municipal supply chain management regulations. Read on.

Withdrawn IN 01 April 2007: Interpretation Note 32 (Issue 1)— Public benefit organizations (PBOs): prudent investments. Withdrawn.*

Archived IN 31 August 2007: Interpretation Note 24 (Issue 1)— Public benefit organizations (PBO): trading rules. Archived.*

On these 2007 items 31 August 2007: Tax Shock, Horror Database updated with INs archived in 2007. GN 172 GG 37421 14 March 2014: Declaration of greenhouse gases as priority air pollutants. Under the

National Environmental Management: Air Quality Act. Very relevant to the proposed carbon tax, on which, read on.

VAT Connect August 2014: Issue 4. Courtesy of a kind soul at SARS. GN 482 GG 38822 29 May 2015: Amendment of regulations issued in terms of the Construction Industry

Development Board Act. These are radical draft regulations, applying to both private sector & public sector clients under ‘construction works contracts’, including provisions relating to prompt (thirty-day) payment. What a pity that, in relation to the state, they will be overridden by the outrageous, undoubtedly unconstitutional State Liability Act (147, 148 TSH 2015).

High Court case 11 August 2015: Hyde Construction CC v Deuchar Family Trust and Another (12471/2012; A460/2013) [2014] ZAWCHC 118; 2015 (5) SA 388 (WCC). A major decision, delivered by Roger J, on the authority to act of trustees, traversing all the famous decisions on the subject. A judgment requiring very careful study.

CCT decision 27 August 2015: Minister of Defence and Military Veterans v Thomas [2015] ZACC 26. Under the Compensation for Occupational Injuries & Diseases Act (COIDA). A doctor employed by a provincial government suffered a work-injury while on secondment to the central government. COIDA precludes a claim for workplace-damages against the employer. The Minister argued that her employer was the State; she argued that it was the province, & sought delictual compensation from the state. Unable to reconcile the various applicable laws, the Constitutional Court chose the Bato Star route, as best promoting ‘the spirit, purport & objects of the Bill of Rights’. Per Froneman J (footnote suppressed):

At stake is Dr Thomas’s fundamental right to bodily integrity and security of her person, a right that underlies her common law claim for workplace damages. The interpretation advocated for by the Minister precludes a further delictual claim and is thus more restrictive of Dr Thomas’s rights. On that score the Supreme Court of Appeal’s interpretation must be favoured and, therefore, upheld. To deprive her of her full common law entitlement would, in these circumstances, not be justified.

Since a truly tricky point of law was involved, you cannot really blame the Minister for his

Issue: 152 Tax Shock Horror Database—15 299 items (3,92 GB)—4 913 subscribers November 2015

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152 Tax Shock, Horror 2015—November—2


recalcitrance. See also the Monthly Notebook.§ Treasury presentation 27 August 2015: Urban investment partnership conference.§ IRBA release 30 September 2015: SA maintains first position for the strength of auditing & reporting

standards for six years in a row: For the sixth year in a row, South Africa has been ranked number one—out of 140 countries—for the strength of its auditing and reporting standards, according to the World Economic Forum’s (WEF) Global Competitiveness Index for 2015–2016 released today.

GN R 908 GG 39247 02 October 2015: Community Schemes Ombud Service Act, 2011—regulations for fees & levies on Community Schemes Ombud Service. Publication for comment. Yoicks! Yet another tax!

Treasury presentation 22 October 2015: Investor presentation. The local version. Read on. Sunday Independent 25 October 2015: Former Chief Justice quits public services forum. On the retirement of

former Chief Justice Sandile Ngcobo as chair of the Independent Commission for the Remuneration of Public Office Bearers.§

Treasury report 29 October 2015: Debt management report 2014/15. Admirable transparency. GN 1031 GG 39344 30 October 2015: Notice regarding the maximum number of casino licences that may

be granted throughout the Republic. Under the National Gambling Act. The state blatantly maintaining an oligopoly (under the guise of controlling the evils of gambling),§

GN 1034 GG 39347 30 October 2015: Guidelines, rules & conditions pertaining to fabrics imported in terms of rebate items 320.01/5407.61/01.06, 320.01/5903.20.90/02.08 & 320.01/5907.00.90/02.08 for the manufacture of upholstered furniture. Promulgated by ITAC. As usual, in order to claim the rebate, applicants must jump through a thousand hoops. With all our regulation, a visitor from Mars might think we were a law-abiding nation.

GN R 1043 GG 39348 30 October 2015: ITAC—Export control. ITAC changes the rules promulgated as GN R 92 GG 35007 of 10 February 2012 (108 TSH 2012) on waste & scrap batteries & accumulators.

GN 1047 GG 39350 30 October 2015: Department of mineral resources. Exempted by Dr Red Rob for twelve months from s 10(1) of the Broad-Based Black Economic Empowerment Act.§

GN 1047 GG 39352 30 October 2015: Think ITAC. Think chicken. This is a rebate of the full anti-dumping duty on US frozen chicken, & draft guidelines pertaining to a rebate provision for rebate of the anti-dumping duty on bone-in chicken pieces under the Customs & Excise Act. I guess we lost this particular game of, well, chicken.

LSSA website November 2015: A revamped website for the Law Society of SA.§ NEDLAC website November 2015: Gasp! Action. Palpable action! In the form of a new website.§ GG 906 GG 39201 1 November 2015: Rate of interest on government loans: on this day the increase in the

Standard Interest Rate under s 80(1)(a) & (b) of the Public Finance Management Act translates into an increase in the ‘prescribed rate’ under s 189(3) of the Tax Administration Act. (See 141 TSH 2014.) Relevant to FBT & the dividends tax.

dti release 02 November 2015: Repeal of sector codes not aligned to the amended codes. ITAC guidelines 02 November 2015: AGOA: Rebate provision for bone-in chicken from USA—Draft

guidelines for the application of a DAFF quota allocation import permit in terms of rebate item…(rebate item number will be allocated at a later stage by SARS) & the application of a rebate permit:

The South African Poultry Association (SAPA) and the USA Poultry and Egg Export Council (USAPEEC) and National Chicken Council (NCC) agreed on an annual quota of 65 000 MT (the quota) of bone-in chicken pieces, classifiable under tariff subheading 0207.14.9, that can be imported into South Africa without payment of the applicable anti-dumping duty as listed in Schedule 2 Part 1 to the Customs and Excise Act, 1964.§

Treasury release 02 November 2015: Publication of the draft Carbon Tax Bill for public comment. Another potty idea, coming at the worst possible time for the economy:

The carbon tax will be administered by the South African Revenue Service (SARS). SARS will liaise with the DEA and be able to access the National Atmospheric Emissions Information System (SARS) which will contain emissions information as reported by companies. Energy use data reported to the DoE will also be incorporated into the SARS which will strengthen the monitoring and verification system to support the implementation of the carbon tax.

Draft bill 02 November 2015: Draft Carbon Tax Bill, 2015 [B—2017]. This new tax will be treated as an environmental levy under the Customs & Excise Act. In that way, they avoid creating a seventeenth tax Act, & make compliance hugely complex & dangerous.

Draft EM 02 November 2015: Draft Explanatory Memorandum for the Carbon Tax Bill, 2015. Treasury presentation 02 November 2015: Investor presentation. The international version. Here is the slide

on ‘Fiscal policy overview’: Government’s central fiscal objective over the medium term is to stabilize the growth of debt as

a share of GDP Continued revenue growth and strict adherence to the planned expenditure ceiling are

projected to result in net debt stabilizing at 45,7 per cent of GDP in 2019/20



A proposed long-term fiscal policy guideline links expenditure and GDP growth Expenditure on core social and economic programmes will be maintained Government continues to support the capital expenditure programmes of SOCs In recent months, two risks identified in the 2015 Budget materialized: a public-sector wage

agreement significantly above inflation and a deterioration in economic performance The fiscal framework accommodates these developments and the fiscal trajectory remains on

course to achieve government’s objectives Draft PN 02 November 2015: Draft public notice updating the returns of information to be

submitted by third parties: Explanatory Note: This draft public notice is issued in terms of section 26 of the Tax Administration Act, 2011, which enables the Commissioner to by public notice require certain third parties to submit returns as provided in the notice. The draft notice will, with effect from its date of publication, replace Notice 260 issued in Government Gazette no 36346 dated 5 April 2013 and Notice 420 issued in Government Gazette no 36565 dated 14 June 2013.

Another huge cost imposed upon society, called upon to perform IT services for SARS, free, gratis & for nothing, while the DTC recommends that SMEs be paid for completing their returns (136 TSH 2014, 143 TSH 2015). What a lag!

National Assembly 03 November 2015: Committee not satisfied with DOL's contribution to fighting release unemployment. What a droll idea! That the department of labour might have any role to

play in the reduction of unemployment. Or that an underspent R100 m might have made any impact at all upon anything other than, very marginally, the wellbeing of the rapacious rent-seeking predators in & around government.

Treasury release 03 November 2015: Provisional figures on loan issues, national revenue fund receipts/payments & cash balances as at 31 October 2015—issued by the Director General: National Treasury.

Bill 03 November 2015: Protection of Investment Bill, 2015 [B 18B—2015]. With explanatory memorandum. Is it my imagination or has this bill been toned down (128 TSH 2013, 130 TSH 2014, 148 TSH 2015)? For example, it used to be called the Promotion & Protection of Investment Bill. Even so, it is clause 12(1), on the right to regulate (a hugely misleading heading), that remains a concern. The SA government displays no ability rationally to balance competing values or to restrain voracious elites exploiting those values. If you are the outfit responsible, for example, for ESKOM, can you, with a straight face, speak of ‘fostering economic development, industrialization & beneficiation’ or ‘protecting the environment & the conservation & sustainable use of natural resources’? Like the other listed ‘rights to regulate’, it’s a highfalutin rendition of the brigand’s bargain: ‘Your money or your life!’

Updated IN 03 November 2015: Interpretation Note 6 (Issue 2)— Resident—place of effective management (companies). This is a most important IN, demonstrating a generational change of heart on the part of SARS, & a move closer to international standards. I look forward to an opportunity to study it in detail, but it looks great.*

AGSA release 04 November 2015: Auditor-General reports slightly improved audit results for national & provincial government, but cautions about the slow pace in addressing internal control deficiencies. At the AGSA, every turd traditionally comes gift-wrapped:

Were it not for the slow response in addressing audit recommendations aimed at improving internal control systems and eliminating governance risks and other concerns raised by his office, the national and provincial governments would have recorded much-improved audit results for the 2014-15 financial year, Auditor-General (AG) Kimi Makwetu said today.

And if wishes had wings, pigs would fly. This constant bum-kissing is undignified. AGSA report 04 November 2015: PFMA 2014–2015—National & provincial audit outcomes. An extract

from the executive summary: The number of auditees that received a financially unqualified opinion with no findings (clean audits) increased to 131 (28%). These auditees comprise 47 departments and 84 public entities. The biggest moves towards clean audit opinions in 2014–15 were by departments, increasing their total from 40 to 47.

If this is success, we must pray never to experience failure. In all fairness, though, I must report that this is the first year I have been able actually to access the AG’s national audit report, so there really is palpable progress. Soon it will be a better life for all.

GN 1055 GG 39378 04 November 2015: Amended B–BBEE verification manual.§ SARB speech 04 November 2015: African economic & financial development in challenging times.

The governor: If sub-Saharan Africa is to see a healthy expansion of both international and domestic investments in its securities markets, the region requires a strong governance structure, proper regulation and supervision, and adequate reporting and auditing standards in these markets. We should not underestimate, for instance, the impact on South Africa’s ability to attract and retain foreign investments from our strong performance in this respect. Indeed, in the 2015 Global Competitiveness Report published this September by the World Economic Forum, South Africa



continued to score first, among 140 countries, on criteria such as ‘financing through local equity market’ and ‘strength of auditing and reporting standards’. We came second in the regulation of our securities exchanges and third in the protection of minority shareholders’ interests.

FMF release 04 November 2015: Investment bill is flawed, unlawful, & risks SA’s future. On a briefing by Dr Anthea Jefferey (IRR).§

Treasury workshop 05 November 2015: National Treasury & the World Bank workshop on the relationship between fiscal sustainability, redistribution & social spending.§

FIC release 05 November 2015: Please note: the public hearings on the Financial Intelligence Centre Amendment Bill have been extended to 8 January 2016.

GN 1064 GG 39368 06 November 2015: Codes of good practice on broad based black economic empowerment. Draft revised forestry code.§

GN 1065 GG 39368 06 November 2015: Guidelines for the issuing of licences for pharmacy premises. Under the Pharmacy Act. One day all business will be regulated in this fashion, with the number of each type strictly controlled & located.§

GN 1080 GG 39379 06 November 2015: Review of limitations on fees & interest rates regulations. Under the National Credit Act. To be effective six months after this date. It looks like this should have been a regulation.§

SARB speech 06 November 2015: African central banks & monetary policy challenges. Francois Groepe.

SARS release 06 November 2015: Official opening of the SARS Newcastle branch.* Draft rule 06 November 2015: Draft amendment of rules under the Customs & Excise Act (s 120—

currency conversions for determining value of goods exported or to be exported).* dti release 09 November 2015: Invitation for public comments on the draft amended B–BBEE

property sector codes. Treasury release 09 November 2015: Inviting technical tax proposals for Annexure C of the 2016 Budget

Review proposals: The National Treasury invites taxpayers, tax practitioners and members of the public to submit any technical proposals to improve or correct current tax legislation, including the closing of loopholes and addressing of unintended anomalies. Proposals received will be considered for possible inclusion in Annexure C of the 2016 Budget Review, released as part of the 2016 Budget Review.*

GN 1085 GG 39383 09 November 2015: Code of good practice on employment of persons with disabilities. Under the Employment Equity Act.§

dti release 10 November 2015: Minister Davies gazettes the draft amended B–BBEE forest sector codes.

GN 1088 GG 39386 10 November 2015: A call for public comments on the document titled ‘Proposal for the new national skills development strategy (NSDS) & sector education & training authorities (SETAs) landscape within the context of an integrated & differentiated post-school education & training system (NSLP-2015)’. Have the SETAs ever produced an ounce of value other than early sinecures for ANC worthies at the dawn of the new SA (shortly after the replacement of university vice-chancellors, at hugely inflated salaries)? Will any fresh recombination of acronyms prove to be any better?§

Tax statistics 10 November 2015: Joint media release by the National Treasury & SARS.* Tax statistics 10 November 2015: 2015 Tax statistics. From the National Treasury & SARS.* Tax statistics 10 November 2015: 2015 Tax statistics—highlights.* Tax statistics 10 November 2015: Launch of 2015 Tax Statistics 8th edition. Presentation by the

National Treasury & SARS.* SARS website 10 November 2015: Service offerings per channel. I suppose this is about what you can

do where. Most unwisely (!), it includes stuff relevant to dispute-resolution, which is already hopelessly cocked up under two pathetic regulations & one poorly drafted act. Bad as they are, however, these take precedence over this crap. It’s supposed to be rule of law, not rule by bloody idiots.*

SARB release 11 November 2015: Resignation of Mr Hlengani Mathebula. Soon to be the former Head: Group Strategy & Communications.

SARS release 11 November 2015: 25 SARS offices open Saturdays 14 & 21 November at 8 am.* BPR 210 11 November 2015: Liquidation distribution followed by an amalgamation

transaction.* FMF website 11 November 2015: Black advancement in SA. By Garth Zietsman.§ Treasury workshop 12 November 2015: Fiscal policy workshop. With three papers: Fiscal policy in Ireland:

achievements & prospects; The new fiscal guidelines & a ‘rule of thumb’; Making fiscal policy ‘work’. I have two problems here: (1) The government is unlikely to heed anything the politically disabled Treasury says. (2) It would take more than a Microsoft PowerPoint slideshow to convince me that tax incentives produce real effects other than rent-seeking behaviours. Yet for economically impotent bureaucrats, robbing Peter to pay Paul has to be made to sound like a substitute for achievement & progress.§

SARS Connect 13 Number 2015: Tax Practitioner Connect (Issue 2—Nov 2015). The last issue I have in



the Tax Shock, Horror Database is Issue 8 of 2012. This one includes a note on taxpayers’ rights to transfers & access to their own tax profiles (eg 151 TSH 2015).*

DTC release 13 November 2015: Release of Davis Tax Committee’s first interim report on carbon tax for public comment.

DTC report 13 November 2015: First interim report on carbon tax for the MOF. FATCA arrangements 13 November 2015: Competent authority arrangement between the competent

authorities of the United States of America & the Republic of South Africa. In force on 20 October 2015. The best US legalese money can buy. What might it all mean?*

News24 13 November 2015: SARS official at KMI Airport ‘yells’ at Virgin's Branson. No one told him (Richard Branson) to report to customs.§

Business Day 16 November 2015: Hudaco in legal battle to recoup R500 m: JSE-listed industrial group Hudaco has taken legal action against its advisers on an empowerment transaction to recover hundreds of millions of rand it claims to have lost through intentional misrepresentation. It is also claiming there has been negligence on the part of Bravura Equity Services and Cadiz Asset Management. Hudaco said on Tuesday it aimed to recoup R180 m in ‘alleged secret profits’ and a further R312 m paid to the South African Revenue Service (SARS) as a penalty.

Sounds like one of those circular transactions featured on the cover of a famous SARS publication. And also like ‘the Devil made me do it’.§

Business Day 16 November 2015: Cut red tape to help diamond beneficiation industry. We are reportedly down to just 200 polishers & cutters. While, admittedly, the global trade is currently under pressure, our tax policies have fatally hobbled this industry (in the same way as we drove blue-water shipping to other lands; eg 73 TSH 2009).§

SSA release 17 November 2015: Operating costs erode private sector profits. Commentary on Statistics SA latest ‘Annual financial statistics’ report:

Employment costs in particular have grown steadily over time. Prior to the recession, net profits before tax rose faster than employment costs, but from 2008 to 2010, profits declined. After 2010, profits experienced slower growth than before the recession, but employment costs continued to climb.

It is a rare occasion when I can extract anything from this website. Act 17 November 2015: Rates & Monetary Amounts & Amendment of Revenue Laws Act 13

of 2015 (13 pages). Nice & ‘early’ for a change.* FMF release 17 November 2015: Twin peaks or twin daggers for the insurance industry &

consumers? On a briefing by Professor Robert Vivian (WITS) & Leon Louw (FMF).§ Tax Ombud notice 17 November 2015: Relocation of the Tax Ombud office. To Menlyn Corner, 2nd Floor,

87 Frikkie de Beer Street, Menlyn, Pretoria, 0181.§ Updated SARS guide 18 November 2015: Guide on the determination of medical tax credits (Issue 6).* SARS release 18 November 2015: Last Saturday to file tax returns is 21 November.* SARS website 18 November 2015: ATR freeze over festive season:

For Advance Tax Rulings the 19 business days from 16 December 2015 to 15 January 2016 (both dates included) must be added to the estimated time to complete a ruling application. The freeze period applies to all applications in progress during the period.

Not according to any tax Act accessible to me.* Business Day 18 November 2015: Mere conjecture cannot fly for airline expansion strategy. By Dudu

Myeni (SAA chair).§ National Assembly 19 November 2015: Small business development committee recommends regulation of release small-scale businesses:

‘We feel strongly that the regulation will address issues of unfair business practice in this sector and ensure that owners also contribute to the tax revenue’, said Committee Chairperson Ms Ruth Bhengu. The Committee undertook an oversight visit to KwaZulu-Natal, Eastern Cape and Gauteng to assess the state of small, medium and micro enterprises (SMMEs) and cooperatives. The focus was largely on tuck shops, spaza shops, street vendors and general dealers. Ms Bhengu said it became clear during the visit that these businesses had initially operated in the township and village economy without any competition or assistance from government, but the entrance of foreign nationals in the space created unfair competition. ‘The emergence of foreign nationals demanded that local business owners have a better way of organizing themselves and the development of tailor-made support services from the Department. Wholesalers also compete in this space, making the playing field uneven’, she added. As far as these small-scale businesses are concerned, the Committee has recommended that the Department pay attention to the felt needs of the sector and develop programmes aimed at responding to them.

It never ceases to amaze me how similar is the ANC to the Nationalists of yore—fascist, racist, economically illiterate, & incompetent. Does anyone else remember what was done by the Nats to SA’s (never-compensated) Indian small-business community?

MPC statement 19 November 2015: Statement of the monetary policy committee—increased to 6,25% (6%):

Although the inflation forecast is relatively unchanged since the previous meeting, the upside risks to the inflation outlook are more pronounced. As noted, these risks relate to the persistent



exchange rate depreciation, electricity tariffs and food prices, and are assessed to outweigh possible downside risks from lower international oil prices and subdued exchange rate pass-through. While these factors cannot be dealt with directly through monetary policy, the concern of the Committee is that failure to act could cause inflation expectations to become unanchored and generate second-round effects and more generalized inflation. Although core inflation has remained steady and inflation expectations to date have been relatively anchored, they remain at uncomfortably elevated levels.

I’ve racked my brains for a kinder response but shall stick with ‘Nutty’. Nevertheless, should I ever meet Inflationary Expectations, I shall shake his or her hand.

MPC statement 19 November 2015: Supporting documents—Summary of assumptions, & Selected forecast results.

GN 1158 GG 39422 19 November 2015: Agreement between the government of the Republic of South Africa & the government of the Republic of Kenya for the avoidance of double taxation & the prevention of fiscal evasion with respect to taxes on income. On 19 June 2015.*

LSSA release 20 November 2015: Law Society concerned at threats against lawyers & judges in Lesotho:

The Law Society of South Africa (LSSA) expresses its solidarity with our colleagues in Lesotho and also its serious concern at reports from our colleagues of threats being experienced by lawyers and judges involved in matters relating to Lesotho Defence Force (LDF) soldiers who were alleged to have mutinied earlier this year.

ICRPOB release 20 November 2015: Annual remuneration recommendations for 2015/2016. By the Independent Commission for the Remuneration of Public Office Bearers. Increases of 5%, 5,5% & 6% for all, & 8% for senior traditional leaders & R91 000 for headmen & headwomen. The President goes up, it is recommended, from R2 753 689 to R2 891 373 (5%) as from 1 April 2015; the Deputy President goes to R2 732 412; ministers to R2 322 534; & deputy ministers to R1 912 656. Mere recommendations.

SCA case 20 November 2015: City of Tshwane v Uniqon Wonings (20771/2014) [2015] ZASCA 162. How to calculate rates on township land in order to obtain a clearance certificate from the relevant municipality in the process of selling an erf.

GN 1149 GG 39430 20 November 2015: Codes of good practice on broad based black economic empowerment. Amended tourism B–BBEE sector code. Under the Broad-Based Black Economic Empowerment Act.§

GN 1154 GG 39433 20 November 2015: Section 12I tax allowance programme. ArcelorMittal South Africa Ltd. Under the Income Tax Act.*

GN 1155 GG 39433 20 November 2015: Section 12I tax allowance programme. ArcelorMittal South Africa Ltd.*

GN 1156 GG 39433 20 November 2015: Section 12I tax allowance programme. Clover Waters (Pty) Ltd.* GN 1157 GG 39433 20 November 2015: Section 12I tax allowance programme. Naledi Forging (Pty) Ltd.* GN 1158 GG 39433 20 November 2015: Section 12I tax allowance programme. PG Bison (Pty) Ltd.* On these items 20 November 2015: Corporate mendicants in Dr Red Rob’s soup-kitchen queue. GN 1159 GG 39428 20 November 2015: Explanatory memorandum for annual remuneration

recommendations for 2015/2016. From the Independent Commission for the Remuneration of Public Office Bearers (in the Presidency).

GN 1160 GG 39429 20 November 2015: Codes of good practice on broad based black economic empowerment. Draft AgriBEE sector codes. Under the Broad-Based Black Economic Empowerment Act.§

SARS website 20 November 2015: From 1 April 2016, manual forms of payments will no longer be accepted by SARS:

Payments will have to be done electronically or in the banks. This effort is undertaken to streamline operations and enhance efficiencies at SARS branches. Therefore, the ‘Payments Queue’ at SARS branches will cease to exist. In addition, no cheques (either posted or dropped off at SARS drop-boxes) will be accepted. Please note that this change excludes Customs. Taxpayers have the following existing options to make payments: At your bank/Via eFiling/Via Electronic Funds Transfer (EFT). More info will be shared in due course.

By all means, but be sure to share as well the legislative or common-law authority underlying this ‘streamlining’ initiative.*

dti release 22 November 2015: Minister Davies gazettes the amended Agri–BEE sector codes. DAFF release 23 November 2015: Availability of the South African Revenue Services (SARS) & the

South African Police Services (SAPS) during the distribution of applications for the fishing rights allocation process 2015/16 (‘FRAP 2015/16’). Did you got a licence? If not, register as a taxpayer here, & apply for a tax clearance certificate there, under the benevolent eye of the SAPS. And that is just to apply for a licence. It’s a positive drive aimed at keeping poor people characterized as criminal poachers. Am I the only one who remembers the ANC’s early promise that we wouldn’t need a piece of paper to earn our livings? I myself am a victim of modern guild laws, & must assert & prove annually that I have studied in my field…for a full ten hours.



GN 1171 GG 39439 23 November 2015: Language policy of the South African Revenue Service published in terms of s 4(2)(h) of the Use Of Official Languages Act. Policy or wish list?*

FMF submission 23 November 2015: Submission to SCOF on the Financial Sector Regulation Bill, 2015. Some trenchant criticisms of the proposed ‘twin peaks’ approach to this issue, & of the lack of any socio-economic impact assessment of the proposal.§

ZAeconomist 23 November 2015: Monetary policy in SA—the dangers of bad theory put into practice: In simple theories of inflation used by most central banks, including the US Fed, and as explained very clearly in an important speech given by Fed Chair Yellen recently, the influence of inflationary expectations on prices—that find the way into prices asked for—are combined with and excess demand or supply variable, known as the output gap. The theory is that the wider the output gap, the less inflation—for any given inflation expected. The Reserve Bank has seen fit to deny the role of the output gap and its own already higher interest rate settings in restraining inflation. It is a peculiar monetary policy and, more important, theory of economic behaviour that is being applied by the Reserve Bank.§

SCOF hearings 24 November 2015: Advantages of the tax & retirement reforms contained in the on retirement reform Taxation Laws Amendment Bill, 2015. Annexure A: Question & answer document.

Annexure B: Impact of annuitization on provident fund members. Annexure C: Data on provident fund members, retirement values & impact on net pay. Annexure D: Responses to National Treasury consultation. Potential actions to address concerns raised about the implementation of reforms. The tension mounts. Will there be riots?

Treasury release 24 November 2015: Media reports about developments at SAA: The Minister of Finance has noted recent media reports about developments at SAA. Media reports about the position of the National Treasury and the Minister on the Airbus swap transaction are premature. SAA last week submitted a section 54 application to the Minister, to restructure the Airbus deal. The National Treasury's Fiscal Liabilities Committee is currently studying the application and will make recommendations to the Minister in due course. A decision is yet to be made on the application. The Minister will be looking for a deal that benefits the airline financially, or one that does not leave SAA in a worse-off position.

The Minister is also concerned about senior management movements at the airline. ‘Leadership stability is crucial to implementing the Long Term Turn-around Strategy so that the airline can return to financial sustainability. I have therefore requested the board to brief me on these developments and their impact on the operations of the airline’, the Minister said.

The Minister wishes to state that the board of SAA is in quorum and the process of appointing a full board is underway.

Yeah. By taking over SAA, the National Treasury bit off more than it could chew, & has already been humbled, no matter how successful its damage-control might be.

GN 1173 GG 39444 24 November 2015: Agreement between the government of the Republic of South Africa & the government of the Hong Kong Special Administrative Region of the People’s Republic of China for the avoidance of double taxation & the prevention of fiscal evasion with respect to taxes on income. It came into force on 20 October 2015.*

Treasury/FIC release 25 November 2015: Summary of comments & response & the socio-economic impact assessment report on the draft Financial Intelligence Centre Amendment Bill, 2015. Typically of matters FIC, the links to the underlying documents do not work.

Treasury/FIC response 25 November 2015: But I found one of the documents elsewhere on the FIC website: Summary of comments on the Draft Financial Intelligence Centre Amendment Bill, 2015. These are responses by the Treasury & the FIC to comments made on the bill.

Treasury/FIC response 25 November 2015: And both that one & the other are to be found on the Treasury’s website: Final impact assessment. Aha! This must be the first sign of the new treatment of proposed legislation, which has to be justified, on the basis of facts & evidence. In other words, yet another wad of waffle will accompany every bill.

SARS release 25 November 2015: SARS customs officials detain R4,2 million worth of illicit cigarettes at Limpopo border posts.*

Business Day 25 November 2015: SAA in limbo as Treasury mulls Airbus change.§ CCT decision 26 November 2015: Mashongwa v PRASA [2015] ZACC 36. About the rail commuter who

was attacked in & thrown out of a moving PRASA train, found to be travelling with no guards & open doors. Per Mogoeng CJ (footnote suppressed]:

As I understand PRASA’s position, it is that it took all measures reasonably required of it to secure its rail commuters. Apart from employing security guards in the Northern region where Mr Mashongwa was injured, it also assessed security risks on a regular basis, conducted special search operations on trains and developed a security plan which provided for the deployment of security guards where necessary. Beyond this, budgetary constraints simply did not allow it to go.

This is the standard state defence under our aspirational Constitution (148 TSH 2015). It was sufficient to convince the SCA, although not the Constitutional Court. Since that court is seldom in a position to intervene, it continues to make sense for the government to spend as much as it can on retaining power & as little as possible on getting the governmental job done. You might say the entire country is hurtling along



without guards & open doors, but with an opulent safe-room built into the caboose.§ dti release 26 November 2015: Minister Davies gazettes the amended B–BBEE tourism sector code. Bill 26 November 2015: Standing committee amendments to Taxation Laws Amendment Bill

[B 29A—2015].* Bill 26 November 2015: Taxation Laws Amendment Bill [B 29B—2015].* SARS website 26 November 2015: On the bill:

The Taxation Laws Amendment A and B Bills were approved by the Standing Committee on Finance on 25 November 2015 and passed by the National Assembly on 26 November 2015.

Beware! Some unidentified palooka takes it upon himself or herself silently to alter bills passed by the National Assembly at some stage before they are promulgated as acts. (Otherwise, it is Sipho at the Government Printing Works.) Furthermore, promulgation, by way of publication in the Government Gazette, is necessary before any provision of the bill can become effective, even if retroactively.*§

Business Day 26 November 2015: No sense in government’s appeal of textbook case. By Franny Rabkin. A topic (senseless appeals) recently covered by the Tax Ombud (151 TSH 2015). Personally, I entertain dark suspicions about unhealthy relations between state bodies & the legal profession. Cui bono? That’s what you have to ask.§

GCIS release 27 November 2015: The Presidential Handbook is made public. Thanks only to a court order.

The Presidency 27 November 2015: The Presidential Handbook—on support for the President, his or her spouse & dependent children, & the Deputy President & his or her spouse. The tenth province stakes its claims, in broad brushstrokes.

Treasury release 27 November 2015: National Treasury’s decision not to invoke s 216(2) of the Constitution against the twenty-seven defaulting municipalities that have not honoured their payment arrangements:

All the 27 municipalities responded positively to the correspondence dated 20 October 2015, and committed themselves to implementing sustainable measures to address the root causes of their operational management failures and to honour their financial obligations. Furthermore, the MECs for Finance and CoGTAs, together with SALGA have committed to collectively assist municipalities. The Minister of Finance has therefore decided not to invoke Section 216(2) of the Constitution against these municipalities for now.

About debts due to ESKOM & the water boards. Imagine what must be the position of private-sector service-providers. You might even feel sorry for tenderpreneurs.

GN 1197 GG 39460 27 November 2015: Local government: Municipal Finance Management Act, 2003—proposed amendment of regulations regarding supply chain management. A very minor amendment to GN 868 of 30 May 2005 (see above).

SARB speech 27 November 2015: The challenges for domestic monetary policy amid US policy normalization. Francois Groepe. Mostly a justification of the increase in the policy rate.

Updated IN 27 November 2015: Interpretation Note 20 (issue 6)—Additional deduction for learnership agreements.*

Archived IN 27 November 2015: Interpretation Note 20 (issue 5)—archived.* SARS summary 27 November 2015: Summary of all Interpretation Notes.* DrafT BGR 27 November 2015: Meaning of ‘extract’ in s 6A(1)(b). Under the Petroleum Royalty

Resources Act. Comment by 8 January 2016. To extract a mineral is not the same thing as winning it. Perhaps, perhaps not. I am unconvinced.*

SARS release 27 November 2015: Former SARS official arrested for R5 million VAT fraud: The fraud happened over a nine year period. The female suspect is a director of a closed corporation (CC) that provides consultancy and bookkeeping services. She is alleged to have submitted false VAT invoices and bank statements to SARS between 2007 and 2015 to substantiate VAT refund claims amounting to R5,1 million. The investigation commenced after SARS’ risk engines identified the taxpayer for an audit due to the unusual refund trend that emerged over the years. Upon requesting supporting documentation, SARS’s investigators established through third party verification that fictional invoices had been submitted to SARS. They also found that bank statements that were submitted to substantiate refund claims were not authentic. The suspect is a member of the South African Institute of Chartered Accountants and the South African Institute of Certified Bookkeepers. The case was handed over to the National Prosecuting Authority and the Police who issued the warrant of arrest. She is expected to appear in court on Monday. The case was registered under CAS no 389/11/2015 Pretoria Central.*

Now that is the way to report a matter of this kind. Good so! Business Day 27 November 2015: Black lives are better in rainbow nation. By Garth Zietsman.§ SARS release 29 November 2015: Over 5,94 million meet tax deadline:

Of the total number of 5,94 million returns submitted by the 27 November 2015 deadline— 4,2 million returns were from individuals for the 2015 tax year 1,69 million were outstanding returns from prior years 45 390 were trust returns 99,96% of returns were filed electronically, either via eFiling representing 51,84%, or through



electronically assisted filing at a SARS branch or mobile tax unit Manual submissions are down to less than 2 000 returns, representing 0,04% of total volume More than 95% of all returns submitted were assessed within 3 seconds and more than 99%

within 24 hours SARS paid out 1,82 million refunds to the value of 15 billion rand—more than 95% of these

refunds were paid within 72 hours Outstanding return submissions increased with 679 544 returns, representing a growth of

66,43%. This noteworthy increase is ascribed to the success of the administrative penalty regime

Many taxpayers were falsely informed that manual returns are no longer possible, for example, at the SARS Cape Town branch.*

Sunday Independent 29 November 2015: Gordhan laments crumbling state of ANC.§ DST release 30 November 2015: The Government-Industry task team on the R&D tax incentive kicks

off: The task team was established by the Minister of Science and Technology, Naledi Pandor, following her meeting with the private sector on 21 August 2015, which raised important issues about how the incentive can be enhanced to achieve its aims.

* Found or to be found on the SARS website. Concurrently on the SARS ‘What’s new’ page. § Not included in Tax Shock, Horror Database.

LOST & FOUND TSH Database This month 107 items were added to the Tax Shock, Horror Database. Land subdivision Since 16 September 1998, the President has failed to proclaim the Subdivision of

Agricultural Land Act Repeal Act 64 of 1998. C&E consultants Since 1 January 2002, the CSARS has failed under s 99A of the Customs & Excise Act to

gazette requirements for the registration of consultants to principals. PCC 24 8 November 2014: The revised PCC 24 remains unavailable (140 TSH 2014). PCC 30 28 November 2014: PCC 30 remains unavailable (140 TSH 2014). Online banking 14 September 2015: The enhanced platform (nBOL) is described step-by-step on the

Authorizing Credit Push Payments—Standard Bank Business Online Banking nBOL) webpage for SARS payments. Downloaded the page at last.

TP Connect I cannot find Issue 1 of 2015 of Tax Practitioner Connect.

MONTHLY NOTEBOOK

The same term defined in different statutes Per Froneman J in Minister of Defence and Military Veterans v Thomas [2015] ZACC 26 (see the Monthly Listing) (footnotes suppressed):

It is, as a general rule, not permissible to use the meanings attributed to words in other statutes as determinative in the interpretation of a different statute. Where Parliament has defined a word used in a

statute, it is taken as an indication that Parliament contemplated a special meaning assigned to the word and not an ordinary meaning. But if the other statutes traverse the same terrain they might be relevant if the meaning of ‘employer’ in them in effect also determines the meaning of ‘employer’ in the Compensation Act [COIDA]. Whether that is the case depends on their respective subject matter.

EXCON: foreign investment by residents From the Exchange Control Manual (2 April 2015):

6.1 Foreign investment by South African residents 6.1.1 Private individuals (natural persons) Authorized Dealers may allow private individuals (natural persons) who are taxpayers in good standing and over the age of 18 years, to invest up to a total amount of R10 million per calendar year, for investment purposes abroad, but, prior to the transfer of any funds, a duly electronically completed ‘(Tax Clearance Certificate in respect of foreign investments)’, issued by the South African Revenue Service, must be presented to the bank. In addition the Financial Surveillance Department will consider applications by private individuals to invest in fixed property, eg holiday homes and farms in SADC member countries. Furthermore, applications by private individuals for investment purposes, including offshore

properties outside of SADC, will also be considered. Income earned abroad and own foreign capital introduced into the Republic on or after 1997–07–01 by private individuals resident in South Africa may be transferred abroad, provided the Authorized Dealer concerned is satisfied that the income and/or capital had previously been converted to Rand, by viewing documentary evidence confirming the amounts involved. The sale proceeds of South African assets received from non-residents and export proceeds are, therefore, not eligible for retransfer abroad by private individuals resident in South Africa. Where a five percent levy was paid in terms of the Amnesty dispensation, the foreign capital repatriated to South Africa may also not be retransferred abroad. Furthermore, South African residents with foreign assets may not place such assets at the disposal of any third party normally resident in South Africa without the prior approval of the Financial Surveillance



Department. Definitive guidelines in this regard will be available from an Authorized Dealer. In addition, private individuals may not utilize funds in terms of the foreign investment dispensation or any other authorized foreign assets to enter into a transaction or a series of transactions to directly or indirectly acquire shares or some other interests in a CMA company or a CMA asset. Similarly, such funds may not be reintroduced as a loan to a CMA resident. Funds so transferred abroad may not be used to facilitate, directly or indirectly (through any structure) any investment or scheme of arrangement whereby any asset or facility of any nature is acquired

in the CMA. (this includes foreign funds/assets regularized by the Financial Surveillance Department as well as the Amnesty and the Exchange Control Voluntary Disclosure Programme). The creation of the so called ‘loop structures’ by South African resident individuals into the CMA are contrary to the current exchange control policy in force. Such funds may, however, be used to invest in approved inward listed instruments on the bond and securities exchanges. South African residents may, furthermore, invest domestic funds in such listed instruments without restriction (See point 7.9, Sec- tion W).

How-low-can-you-go government—moreI continue to follow, with increasing alarm, the Hersig matter (140, 147, 148, 151 TSH 2015), in which the state, in the form of a provincial health and social department, is attempting to shift its delictual liabilities on to the shoulders of unnamed others, not even parties to the action, as part of an extensive, elaborate ruse to postpone the settlement of its creditors’ claims.

Still using recently appointed private-sector legal representatives, the MEC for health has drawn a notice of motion to present to the SCA, asking for a reconsideration of the court’s refusal to grant leave to appeal, but has failed to lodge it. In fact, the MEC has missed the one-month deadline by a generous margin. Yet, even with no matter before the court, the province’s treasury has desperately importuned the plaintiff’s representatives to uplift writs on the province’s movable property, on the outrageous

ground that there is an appeal pending. The MEC has nevertheless allowed all the other

matters treated by the province in the same cavalier fashion to lapse. The hope seems to be to manoeuvre Hersig before the SCA and from there to consolidate all the similar matters in a case before the Constitutional Court.

The point of the as yet unlodged application for leave to appeal is whether the provincial government, as the employer responsible for the delictual wrongdoers who have left the plaintiff paraplegic, should be entitled to avoid liability for paying those damages in a money judgment, and instead should be entitled to tender an undertaking to pay the accounts of the healthcare providers who might treat the plaintiff in the future within thirty days of presentation of a written quotation to the accounting officer of the provincial department of health.

A broke government contd: how goes the RAF? The latest communication by the Road Accident Fund to its ‘stakeholders’ is even more bizarre than any of its predecessor communications. As an admitted layman in this particular field, I would say that this is indistinguishable from an act of insolvency by a debtor, inasmuch as the Fund voluntarily supplies documentary evidence that it is trading while hopelessly insolvent. As a juristic person (s 2(1) of the Road Accident Fund Act), if the fund is subject to the Companies Act (s 9), this would amount to reckless trading (s 22).

Although the Fund likes to create the impression that it is a benevolent disburser of funds to the halt and the lame, whose activities ought to be celebrated, as being those of an almsgiver, it is in fact the harsh tool of a despotic government, which has statutorily outlawed private insurance of RAF risks, establishing the Fund as a monopolistic insurer, whose premiums are paid by taxpayers and, via the fuel levy, road-users. In other words, the Fund, while not a taxing authority in its own right, is a state enterprise entrusted with a sizeable chunk of the national Budget spending. And, when it delays settling road-victims’ claims, it subjects them to double jeopardy, once in denying them access to private cover, and again in failing to settle their claims. A more severe form of oppression, short of outright slavery, is hard to

imagine. Particularly intriguing is the absence of any sign

that the Fund, being a short-term insurer, acts like one. Sure, it relies to an extent upon reinsurance but, otherwise, it appears to fail the duck test. What it seems to follow is a pay-as-you-go or, rather, do-not-pay-as-you-go policy, not observable, to say the least, in private-sector insurers.

Its communication of 17 November 2015 includes these damaging admissions:

It is clear that our funding (154c p/liter [sic] equating to around R2,8 bn p/m) remains insufficient when compared with our settlement rate per month and the average value of a claims. …. It is important to note that the additional funding is not adequate to reduce the backlog that built up between July 2014 and June 2015 and to ensure that in-month settlements are maintained. As such our projections indicate that it will take 36 months or longer for the levels of the amount owed to start reducing, if at all. Current indications are that the amount requested for payment will be around R11 bn by financial year end March 2016. The situation again confirms that the RAF dispensation is unaffordable.



We have no expectations of any resolution, including additional funding, in the short term and as such we will thus continue to practice cash management and refresh the strategy as is required. We do continuously keep the shareholder environment informed.

Either the Fund cut and paste passages from a letter

addressed to the National Treasury or the reference, at the death, to the ‘shareholder environment’ is a Freudian slip. My take is that, mysteriously, the Fund has squandered countless fortunes, and now, at the worst possible time, wishes it were SAA. How long can the National Treasury (and the rating agencies) ignore this off-balance-sheet liability of this SOE?

Oct 2014 Oct 2015

Provision for Outstanding Claims R99 380 bn R127 498 bn

Fuel Levy Received YTD R11 780 bn R18 097 bn Claims paid in cash R12 21 bn R16 41 bn

Claims requested for payment R16 64 bn Rl9 697 bn Average value of a Claim payment R89 356 R116 426

% growth in claims registrations previous 4 quarters 13% 17%

Property rights & delivery: executory donations I cannot say where but I recently came across a footnote reference to CSARS v Marx NO (A720/05) [2006] ZAWCHC 9; 2006 (4) SA 195 (C) (9 March 2006). It is an undistinguished case, in the sense that it was not taken on appeal, and there is no record, either in SALR or SAFLII, that it was considered worthy of mention in any other reported judgment.

But Julian Ware covered it in 43 TSH 2006, because it was reported in SATC, and I quoted extensively from the judgment in 123 TSH 2013, because I thought it included a useful description of executory donations, and helped to distinguish a donatio mortis causa (a revocable gift in contemplation of death; 112 TSH 2012) from a donation delaying any benefit for the donee until the death of the donor, issues relevant to exemptions from the donations tax to be found in, respectively, s 56(1)(c) and (d) of the Income Tax Act. And the case enjoys a mention in the excellent SARS publication Comprehensive Guide to CGT (Issue 4).

What puts it beyond the pale is the outrageous argument raised by SARS, based upon an entirely imaginary loan, about which the less said the better. Van Zyl J, who delivered the unanimous judgment of the court, was awfully polite in devoting so much attention to the entirely insupportable official position.

What is an executory donation? I have suppressed a footnote in the following extract from the judgment:

An executory donation is so called because it still requires to be effected or perfected, in the sense that something is required to be done before it can be regarded as completely performed. In the present case Traverso DJP held that the donation was executory because delivery thereof would take place at some future time, namely when the donor died. As such it was valid and enforceable in terms of section 5 of the General Law Amendment Act 50 of 1956, the relevant portion of which reads:

No donation concluded after the commencement of this Act shall be invalid merely by reason of the fact that it is not registered or notarially

executed: provided that no executory contract of donation entered into after the commencement of this Act shall be valid unless the terms thereof are embodied in a written document signed by the donor….

And, for a real-life example of such a donation, here are the terms of the very donation under consideration by the court:

1. Donation The donor donates (irrevocably) to the donees, as a donation inter vivos, the sum of R5 000 000 (Five Million Rand) to each of the donees. 2. Delivery The donees shall be entitled on signature of this deed to a vested right in the aforementioned asset but shall not receive any benefit until the death of the donor. 3. Acceptance The donees gratefully accept the donation.

This is sufficient information to show that (a) there is a generally irrevocable contract in existence between the parties but (b) delivery of the subject-matter of the donation has yet to take place. In fact, the contract is subject to a term (not a suspensive condition), to the effect that delivery will take place upon the death of the donor. It amounts to a vesting, subject to a time-clause.

Again, footnotes are suppressed:

It must be borne in mind that a donation made during the lifetime of the donor (donatio inter vivos) becomes contractually and legally binding from the moment the donees accept the donation. It creates rights and obligations just like any other consensual contract…. The donor's intention to make a donation (animus donandi) must arise from generosity (liberalitas) or liberality (munificentia) and be expressed as a promise (offer) to donate, which promise (offer) must be accepted by the donee before a binding contract of donation comes into existence. Once this happens the donation is perfected and it may be revoked only under certain circumstances. The resultant contract is



not sufficient, however, for purposes of transferring the donated asset into the ownership (dominium) of the donee. Performance of the obligation arising from the donation, in the form of delivery (traditio) of the asset donated, first has to take place….

So what actually vests in the donees? Yet the donees are not left twiddling their thumbs until the donor’s demise, since they immediately enjoy a personal right against the donor, or, rather, the donor’s executors to deliver the promised amounts upon the donor’s death. Such a personal right is a form of property, for the reason that it vests in the donees. Being non-assignable, it lacks any direct value, and may be turned into account only by more elaborate means (having, in my view, surprising fiscal consequences).

What does have value is the certain, ultimate transfer of dominium to the donees or their executors, and its present value at the date of the donation is

readily ascertainable by an actuary or professional valuer. If I may be allowed to restate my inarticulately expressed views in 123 TSH 2013, it is this value that is exempted by s 56(1)(d).

How did Van Zyl J deal with the personal rights of the donees?

It is clear from these authorities that the contract of donation, which came into existence when the donees accepted the donation contained in the deed of donation, created personal rights in terms of which the donees could claim transfer of the donation when the donor died. Only when transfer had effectively taken place, would they acquire ownership in the respective amounts donated to each of them. The vesting of a personal right in a donee in circumstances such as the present cannot be equated with transfer of ownership of, or of any other right in, the donation. The deed makes it clear that such transfer cannot take place before the death of the donor.

Trusts & divorce (a trust for your towels) VZ v VZ and Others (2011/5122) [2014] ZAGPJHC 42 (14 February 2014) is one of those unfortunate modern cases following the wholly silly and superfluous idea that the ‘veneer’ of a trust may be ‘pierced’, attributed by Gautschi AJ, in a footnote to his judgment, to Rees and Others v Harris and Others 2012 (1) SA 583 (GSJ). The real issue is whether a trust is valid or invalid. If it is valid, the trust property belongs to or, in a bewind, is at least controlled by the trustees. If it is invalid, the trust property belongs to someone else, usually a male ‘estate planner’ unable to let go, or with an agenda other than ultimately to benefit the beneficiaries.

What makes this case interesting is that the third respondent was a professional trust administration company. But it was the planner who suffered, being found to be in contempt of court, and sentenced to a period of imprisonment, conditionally suspended for a year, on account of his flagrant disregard for his obligation to make maintenance payments. And the ultimate finding was unexceptionable—the assets of four (purported) trusts were declared to be his for the purposes of any redistribution order made in an action (presumably, a divorce) between the parties. (And so they would be, too, as far as his creditors were concerned.)

Initially, only the planner and the trust company were the trustees. Yet there was no evidence of the actual involvement of the trust company in the affairs of the trusts.

The planner had purportedly placed all his assets in the trusts, without exception, seemingly by way of two deeds of donation (a highly unusual state of affairs, placing a question mark upon the valuations used for donations tax purposes). Here is a partial list:

Furniture and household effects, life policy, furniture, kitchen appliances, braai equipment, camping equipment, garden furniture and implements, lawnmower, power tools, bathroom towels and toiletries, cell phone, leather wallet, Rayban sunglasses,

car phone, Mercedes-Benz motor vehicle, office furniture and equipment, planner’s residence, planner’s mother’s residence, six residential units.

Gautschi AJ’s laconic response:

Whilst I could understand the rationale for placing a business and properties in trusts, there does not seem to me to be any commercial rationale for placing all one’s household and personal effects into a trust.

The planner, being married under the accrual system, it seems

embarked upon his ‘prudent estate planning’ without consulting the applicant [the wife] and at a time when the marriage relationship was on shaky grounds.

The planner’s wife was added as a beneficiary of the trusts at a later stage, although not without an odd discrepancy about exactly when (the word ‘backdated’ does not appear in the judgment).

The planner had conveniently declared on oath that all the relevant property was his, showing how he disposed of funds and paid expenses, and even extolling the quality of his furniture and appliances (the very subject-matter of one of his modestly valued donations).

As for the trust company, The Best Trust Company (Jhb) (Pty) Ltd, in one instance an ‘alternate’ to its appointed nominee, Mr Velosa, signed a trust’s financial statements (as far as I am concerned, a legal impossibility). Others were signed by Mr Velosa:

…. It lies within the direct and intimate knowledge of the first respondent [the planner] and Mr Velosa precisely what role Mr Velosa plays in each trust, and to what extent he is simply supine and allows the first respondent to treat the trusts as his personal fiefdoms. They have not done sufficient to dispel the latter, more probable, inference.



From the case law: terms v conditions The so-called conditions of the policy are not conditions as understood in our law; they are undertakings by the insured and therefore terms of the contract. The nomenclature of the policy is that of the English law, which fails to observe the distinction between a condition proper and a term of the contract. Let me quote the following from The Law of Contract by Cheshire and Fifoot, 5th ed. at p 118:

To lawyers familiar with the Roman jurisprudence and trained in modern continental systems the use of the word condition in this context must appear a solecism. By them a condition is sharply distinguished from the actual terms of a contract, and is taken to mean, not part of the obligation itself, but an external fact upon which the existence of the obligation depends…. The orthodox application of the word is by no means unknown to English lawyers. An obligation or a right, suspended until the happening of a stated event, is said in the common law to be subject to a condition precedent.

I repeat that clause 6 contains no conditions suspending the operation of the policy but only terms of the contract. The terms of the contract cannot be changed into suspensive conditions merely by calling them conditions precedent. A term of the contract may be so material that a breach of it will entitle the other party to repudiate the contract, and in the present case the parties have used the words ‘conditions precedent to any liability’ to indicate that the so-called conditions are material terms of the contract.

In our law the fulfilment of a true suspensive condition must be pleaded and proved by the person who is relying on the contract, but the breach of a term in the contract must be pleaded and proved by the person who relies on such a breach as a ground for repudiating liability under the contract.

Per Hoexter JA in Resisto Dairy (Pty) Ltd v Auto Protection Insurance Co Ltd 1963 (1) SA 632 (A).

Words & phrases: ‘association of persons’ Per Nestadt AJA (as he then was) in Shillings CC v Cronje and Others 1988 (2) SA 402 (A):

The use of 'persons' in conjunction with 'association' is probably superfluous. 'Unincorporate' refers to an association 'which does not have a legal persona separate from its constituent members' (per Ogilvie Thompson JA in CIR v Witwatersrand Association of Racing Clubs…. 'Corporate' would have a correspondingly opposite meaning. The central enquiry is the meaning of 'association' ('vereniging'). It is defined in substantially the same terms by a number of dictionaries to which we were referred. I confine myself to the following. According to Black's Law Dictionary 5th ed:

It is a term of vague meaning used to indicate a collection or organization of persons who have joined together for a certain or common object.... An unincorporated society; a body of persons united and acting together without a charter, but upon the methods and forms used by incorporated bodies for the prosecution of some common enterprise.

The Afrikaanse Woordeboek of Terblanche and Odendaal gives the meaning of 'vereniging' (and it was the Afrikaans version of the [Group Areas] Act that was signed) as:

saambinding, saamvoeging; vrywillige organisasie van ’n aantal persone met 'n bestuur aan die hoof en statute en gerig op 'n doel wat nie met die openbare orde in stryd mag wees nie; die saamkom en saamwerk van persone tot 'n bepaalde doel, samekoms, geselskap, genootskap, maatskappy, klub.

(See, too, Nibo (Edms) Bpk v Voorsitter van die Drankraad en Andere 1984 (2) sa 209 (NC) at 213E–in fin….) Some brief amplification of the criterion that

'association' takes the form of an (organized) body of persons and its equation to a society is desirable. The appropriate Oxford English Dictionary definition of 'body' is 'a number of persons taken collectively; an aggregate of individuals'. In Group Areas Development Board v Hurley NO…Steyn CJ, in rejecting an argument that certain persons were 'an association' within the meaning of 'company' in the Group Areas Act (or a body of persons as defined in the Interpretation Act), said at 131A:

These Indians are, however, on the information before us, no more than a number of individuals having a common religious belief. There is nothing to indicate that they are, as Roman Catholic Indians, in any way congregated, organized or associated as a distinct body or association of persons, and they cannot, in my view, pass as either a person or a company in terms of the above mentioned definitions.

Black (op cit ) describes a 'society' as being: An association or company of persons (generally unincorporated) united together by mutual consent, in order to deliberate, determine and act jointly for some common purpose.

In practice their union and consent usually take place by the approval and adoption of a constitution (Law of South Africa vol 1 sv 'Associations' para 498 at 287), providing for membership of the association, office bearers and/or a committee and a name of the association. In most cases there will be little difficulty in identifying a body of persons as an association within the meaning of the definitions referred to. The prime example of a corporate one (under the common law) is the universitas and (by statute) those registered as companies under s 21 of the Companies Act. Illustrative of an unincorporate one is the well-known voluntary association in all its diverse forms.…



Loans payable on demand: if this is a scheme, it sucks A very common mistake made, hard to believe as it might be to seasoned interpreters of tax statutes, is to treat an exclusion or even an omission from a particular provision as amounting to an exclusion from the operation of the entire act. I have encountered it repeatedly.

No matter how often you show the delusional adherent of this thesis how the statute actually works, globally, he (women appear to be more rational) will return, endlessly, to the purely local exclusion, certain that, in truth, you are a fool, since it’s there, innit? It makes you think, dunnit?

The CGT nonresident delusion Perhaps the most famous instance of this phenomenon involved para 80(2) of the Eighth Schedule to the Income Tax Act, which a great many people, who ought to have known better, understood as meaning that a distribution of a capital gain by a trust to a nonresident results in no liability for the CGT, on the ground that para 80(2) fails to mention a nonresident, completely overlooking s 26A, the inclusion in taxable income (even of a trust) of a taxable capital gain (79 TSH 2009).

Gresham’s tax law Making things considerably worse is the little-known Gresham’s tax law—bad ideas drive out good. Time that could usefully be spent on learning more about the actual tax law is squandered on hopeless schemes, with no foundation in law whatsoever.

Forgive me if you’ve heard this one before Now I have come across vague details of what is perhaps the scheme de jour, which appears to be fixated upon an exclusion in the definition of a ‘hybrid debt instrument’ in s 8F(1), s 8F being the provision deeming interest on such an instrument to be a dividend in kind, and nondeductible. A most unpleasant outcome.

Like most of the unwise dividend/interest anti-avoidance provisions hastily shoved into the act or amended, ceaselessly, by the Treasury, the definition is long, complex and impossible to integrate. Focus, then, just on the bit containing the mesmerizing exclusion:

‘[H]ybrid debt instrument’ means any instrument in respect of which a company owes an amount during a year of assessment if in terms of any arrangement as defined in section 80L— …; (c) that company owes the amount to a connected

person in relation to that company and is not obliged to redeem the instrument, excluding any instrument payable on demand, within 30 years—

(i) from the date of issue of the instrument; or (ii) from the end of that year of assessment: Provided that…;

Paragraph (c) of the definition implies the existence of

paras (a) and (b), which make up a disjunctive (‘or’) list of the three possible types of hybrid debt instrument, subject to the inevitable faux proviso.

Clearly, an instrument payable on demand is excluded from para (c), surely because it would be impossible to measure its term, at least not ex ante or even in medias res. And, if it is excluded as well from paras (a) and (b), it is not a hybrid debt instrument and consequently cannot be hit by s 8F. Hooray!

How it works (?) But, so what? Time to add what meagre further details I have so far been able to glean:

Our foreign shareholder lends us money, repayable on demand, with interest also payable on demand. Interest, having been incurred, is domestically deductible for income tax purposes (s 11(a)). As far as the nonresident lender is concerned, the interest has a domestic source (s 9(2)(b)) and is included in ‘gross income’ (s 1(1)), but it is exempt (s 10(1)(h)), and so cannot form part of income or taxable income.

The withholding tax on interest is levied on interest paid to a nonresident (s 50B(1)), with paid meaning the earlier of the date it is paid or is due and payable (s 50B(2)). But, under the scheme, no interest is paid.

Time for some housekeeping. In order for these outcomes to be achieved, the agreement of loan must establish at least an annual liability on the part of the borrower for interest (dies cedit—interest is due, is incurred, it accrues), but payment of the interest (dies venit—interest is payable) is subject to the discretion of the nonresident lender. This is a term (not a condition) of the agreement, subject to a type of time-clause. The interest is neither paid nor payable to the lender until the lender demands payment.

Under a properly drawn contract, I can see this thing working—with a tax deduction for the borrower, and freedom from SA taxes for the lender, albeit subject to an ever-growing currency risk.

And then a reality check: First, there is s 31 to contend with, if the parties

are ‘connected persons’ and if there is a ‘tax benefit’ on the table. This is an anti-avoidance provision, and the transaction between the parties is not what you would readily call an arm’s-length deal, and so is susceptible to the application of s 31. Under s 31(2), SARS could presumably treat the interest as having been paid and so trigger liability for the withholding tax on interest. Otherwise, it might perhaps disallow the interest deduction. Under the shockingly drafted s 31(3), there is also a chance that a deemed dividend in kind might arise.

Secondly, s 23M appears to be designed for just such a situation, that is, if there is a ‘controlling relationship’ between the parties. If it applies, on the ground that interest is incurred during the year but is not subject to tax in the hands of the person to whom it accrues, the deduction available to the borrower will be capped, perhaps at zero. As luck would have it, the task of explaining the operation of s 23M has this month fallen to Michael Stein.

Feature Supplement to 152 Tax Shock Horror 2015

Cases

November 2015

Winners & Losers In That Other Beautiful Game Current & Past SATC Case Reports

by Julian Ware © 2015 J Ware ([email protected])

Tax administration— search & seizure of material Huang & Others v CSARS

Gauteng Division, Pretoria (2014)—77 SATC 283 (judgment delivered by Kubushi J): An unsuccessful ex parte application brought by the taxpayers for the reconsideration of a search and seizure warrant issued in favour of the SARS by a judge in chambers under ss 59 and 60 of the Tax Administration Act. Since all the material facts within SARS’s knowledge were disclosed in its founding affidavit, and SARS established reasonable grounds for a belief that the taxpayers had failed to comply with or had committed offences under a tax Act, there was no foundation for doubt that the ‘issuing’ judge had failed either to apply his mind to the matter properly or exercise his discretion judicially.

Income tax— miscellaneous matters G Bank Zimbabwe Ltd v ZRA v

High Court of Zimbabwe (2014/2015)—77 SATC 305 (judgment delivered by Kudya J): A Zimbabwean case involving the failed attempt by a bank to convince the court of the timing of a deduction of a provision for staff retrenchment costs, the attribution of interest earned on offshore loans, and the withholding of nonresidents’ tax on banking fees charged by foreign banks. But the taxpayer was successful in arguing that it had not entered into a tax avoidance scheme, and that the imputation of notional interest on excess offshore funds was improperly raised by the ZRA.

Customs & excise— refund claim Fastjet Holdings (Pty) Ltd v Minister of Finance & Others

Gauteng Division, Pretoria (2015)—77 SATC 337 (judgment delivered by Kollapen J): The taxpayer claimed a refund of duties paid on the importation of cigarettes that were first cleared and released for home consumption but subsequently detained and seized by the customs authorities. Goods are not irrevocably lost simply because of the reasonable detention of them by the authorities. Ensuring that cigarettes are packaged according to the law is not a circumstance beyond the control of an importer.

Double tax agreement— permanent establishment Taxpayer v CSARS

ITC 1878 (Johannesburg Tax Court—Case 13276 (2015))—77 SATC 349 (judgment delivered by Vally J): Did the taxpayer, a US advisory consulting company, have a permanent establishment in South Africa under art 5 of the RSA-USA tax treaty? An unequivocal and resounding Yes. Specifically, art 5(2)(k) of the treaty denotes that a permanent establishment exists when a resident enterprise furnishes services through employees within the nonresident state for more than 183 days within a twelve-month period. The article does not require that a fixed place of business—which the taxpayer, in any event, had at a client’s premises— is a further requirement. The reduction of additional tax from 200 to 100% by the Commissioner was reasonable, since the taxpayer, a multinational, had to accept responsibility for its actions. SARS’s refusal to exercise its discretion and reduce the interest charge was not unreasonable, since the taxpayer ought to have familiarized itself with the law. A worthy judgment, marred by a rambling introduction and some confusing use of financial terminology.

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Feature Supplement to 152Tax Shock Horror 2015

Briefing

November 2015 Interest: limited deduction

by Michael Stein © 2015 M L Stein ([email protected])

Section 23M was added to the Income Tax Act with effect as from 1 January 2015 and then amended with effect as from 1 January 2016. It limits the deduction of interest by debtors on debts owing to targeted persons not liable to tax on the interest. The idea is to prevent a mismatch between the amount allowed as a deduction to a debtor and the amount taxed in the hands of the creditor when there is a close relationship between the parties. Dealt with here is the version of s 23M applying as from 1 January 2016.

Application Section 23M applies when the creditor to which the interest is owed is in a ‘controlling relationship’ with the debtor or obtained the funding for the amount advanced to the debtor from a person in a controlling relationship with the debtor. In addition, the interest incurred on the debt must during the year of assessment

not be subject to tax in the hands of the person to which it accrues; or

not be included in the net income of a controlled foreign company (CFC) in its foreign tax year commencing or ending within that year of assessment; and

not be disallowed as a deduction under s 23N (the provision limiting the deduction of interest on reorganization and acquisition transactions).

The point is that the interest must not be subject to tax, for any reason. The creditor’s residence is irrelevant. Nonresidents are generally liable to tax on interest from a South African source but may qualify for the exemption afforded by s 10(1)(h) (unless an exclusion from the exemption applies). Residents are also eligible for an exemption, under s 10(1)(i). Presumably, s 23M will also apply if the interest is not subject to tax under a tax treaty.

The amount of interest deductible on all such debts owing by the debtor in the relevant year may not exceed the sum of

the amount of interest derived by the debtor (presumably from all sources), and

a percentage of the debtor’s adjusted taxable income, determined under the formula below,

less

so much of the interest incurred by the debtor on debts other than those mentioned as exceeds the amount disallowed as a deduction under s 23N.

Definitions A ‘debtor’ is defined as a debtor that is a resident or a person that is not a resident but has a permanent establishment in South Africa effectively connected with the debt claim.

A ‘controlling relationship’ is defined as a relationship in which a person directly or indirectly holds at least 50% of the equity shares or voting rights in a company.

Formula The percentage of adjusted taxable income must be determined in accordance with the formula ‘A = B x C/D’, in which:

‘A’ Represents the percentage to be applied. ‘B’ Represents 40. ‘C’ Represents the average repo rate plus 400 basis

points. ‘D’ Represents 10.

But the percentage determined under the formula may not exceed 60% of the debtor’s ‘adjusted taxable income’, which is defined as taxable income reduced by

interest derived; amounts included in the income of a person under

the CFC rules of s 9D(2); amounts recovered or recouped of an allowance

on a ‘capital asset’ as defined in the rules in s 19 dealing with the reduction of debts for purposes other than the determination of a capital gain or capital loss;

and with the addition of

amounts of interest incurred; amounts allowed as a deduction for a s 19 ‘capital

asset’; and an assessed loss or balance of assessed loss

allowed to be set off against income under s 20.

If an amount of interest is to be taken into account under both s 23M and s 23N, s 23M must be applied only after s 23N.


November 2015

Feature Supplement to 152Tax Shock Horror 2015

These provisions do not apply to interest incurred by a debtor on a debt owed to one of the creditors mentioned above when the creditor funded the amount advanced to the debtor with funding granted by a ‘lending institution’ (defined as a foreign bank comparable to a local bank) that is not in a controlling relationship with the debtor, and the interest is determined with reference to a rate of interest not

exceeding the ‘official rate of interest’ applying to fringe benefits plus 100 basis points.

Interest incurred by the debtor in excess of the deductible amount so determined may be carried forward to the immediately succeeding year of assessment, and is then deemed to be incurred in that succeeding year.

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Davey’s Locker

November 2015 Voluntary disclosure programme And foreign assets

by Tony Davey © 2015 A H Davey ([email protected] www.tonydavey.com)

Legal certainty A person with foreign assets making a voluntary disclosure in order to regularize his or her tax position has, in my view, a legitimate expectation as to the certainty of the tax result.

The spirit of the voluntary disclosure programme (VDP) offered by the Tax Administration Act is surely to encourage taxpayers with offshore taxable income to enter fully or more fully into the tax system, but at a determinable cost, capable of being evaluated in advance.

Under the VDP, undisclosed taxable income on offshore investments (interest, dividends, rentals and realized capital gains) is certain and measurable and thus subject to tax, with interest, but without the imposition of understatement penalties. Less certain are outcomes under the latest position adopted by the SARS VDP unit on:

The prescription period for re-opening assessments.

The acquisition funding of offshore assets (whether such assets were funded with pre-tax or post-tax monies).

The funding of assets transferred into an offshore trust (whether such a transaction is a donation or

loan).

Record-keeping The reality in practice is that residents have seldom kept historic records, for fear of self-incrimination. And offshore trustees were not required by the law of tax-haven jurisdictions to register trusts, render tax returns or produce financial statements.

In most instances the only available information is a valuation statement of the investments. Thus it is often not possible for a VDP applicant to comply with the documentary requirements of SARS, and an application might as a result be cancelled or withdrawn.

In the event that SARS should subsequently proceed to making an estimated assessment, under s 102(2), it bears the onus of proof. Here I rely on para 6 of the SARS publication ‘Voluntary Disclosure Programme’ GEN–VDP–02–G01 revision 1 of 1 October 2012, which states that VDP information remains confidential and ‘is not shared with any other division of SARS’.

VDP tax cost The VDP does not forgive actual tax or interest on late payments but only understatement penalties.

Thus, for example, if the capital

originally funding a trust is considered to be a donation (instead of an interest-free loan), 20% donations tax plus interest remains due and payable under the VDP. Assuming an 8% annual simple interest rate and a ten-year period since inception of the trust, this equates to 36%—and if a twenty-year period is involved, 52%—of the original capital!

Add to this the Reserve Bank’s penalty, which in my experience is usually 20% if the monies are retained abroad and 10% if remitted, your original capital (and possibly investment growth, which has been notoriously poor abroad) may be largely eroded.

Pragmatic solution An approach of benign tolerance is required by SARS of bona fide VDP applications, unless there are glaring anomalies in an applicant’s version. For example, an interest-free loan to an offshore trust could, under domestic common law, have been made under an oral contract. If required, the oral agreement could now be recorded in writing.

Failing a benign approach by SARS, we need another tax and forex amnesty.

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Shortcut Keys in Word by Duncan S McAllister ©2015

November 2015

Language formatting As a Jaws (Job Access with Speech) screen-reader user, I recently experienced a problem when reviewing a Word document.

Jaws read out parts of the text in a French accent, which was impossible to understand. In other parts of the document, Jaws read out the text in Portuguese (Brazil), which was equally enigmatic.

Now Jaws does have a setting enabling language detection to be turned off (Ins + V, type language in the search box, arrow down to Language detect change, and uncheck the check box, SHIFT + TAB until you reach OK and ENTER).

But regardless whether you are a screen reader user, there is another problem. The spell checker (F7) will show English words as spelling errors. It was therefore necessary to restore English (South Africa) to the text in question.

To change the language formatting, select the affected text, press ALT, R, U, L (set proofing language). Then type E and arrow down the list of English

choices until you reach English (South Africa) and hit enter. If it’s a large document it will be easier to highlight the entire document (CTRL + A) before following the procedure outlined.

To check if you have successfully changed the language formatting, press F6 and arrow to the right until you reach the language indicator button.

Another way of changing the language is to highlight the text, press F6, arrow to the right until you reach the language indicator button, press spacebar, and arrow up or down the language list until you reach the desired language and hit ENTER.

In Word, I find that some text persists in regarding itself as being French, indicating a spelling error for the English text so regarded, even if it is in the same paragraph as further, unmolested English text. No matter what I do, the next time I open the file, the error reappears.—Ed

T S H


November 2015 Evidence Corner—evidence could make a welcome change to tax cases

Can an estranged spouse be compelled to give evidence against her husband?

by Andrew Paizes © 2015 A Paizes ([email protected])

A spouse is, in terms of s 195(1) of the Criminal Procedure Act, not a compellable witness against the other spouse. Further, in terms of s 198(1) of the Criminal Procedure Act,

[a] husband shall not at criminal proceedings be compelled to disclose any communication which his wife made to him during the marriage, and a wife shall not at criminal proceedings be compelled to disclose any communication which her husband made to her during the marriage.

The reason for this privilege is sometimes said to be the promotion of confidence between husband and wife or the protection of the sanctity of marriage. Since it is unlikely that married couples would become more secretive if there were no privilege, and it is just as unlikely that the marital relationship would collapse without it, a better reason is probably the simple proposition that public opinion would find it unacceptable if spouses were forced to disclose communications from each other.

The scope of these principles was tested in the recent case of S v Mgcwabe 2014 (2) SACR 517 (ECG). The question facing the court in that case was this: can the fact that a marriage relationship has already been severely damaged affect, in some, way, the non-compellability of the spouse as set

out in s 195(1)? One of the witnesses against the

appellant was his estranged wife, who was not living with him at the time of his trial. She had not been informed, initially, of her right to refuse to testify against him, and it was clear that she would not have testified had she been so informed. Nevertheless, since she was already in court, she stated, on being advised of her rights, that she wanted to proceed with her testimony.

This outcome, said Nepgen J (with whom Alkema J agreed), was a misdirection. Although the rationale of the privilege was the preservation of the sanctity of marriage, or ‘the consideration that the marital relationship should be protected’ (at [12]), there was no justification for calling the appellant’s wife without informing her of her right not to give evidence.

Section 195(1) gives the spouse ‘an absolute right to make an election not to testify’. It does not provide that a spouse shall not be compellable to give evidence ‘only if this is necessary to preserve the marriage relationship’. Further, said the court, it did not help that she had elected to continue with her evidence after she was made aware of the provisions of the section, since the decision to do so was taken because, as she put it, she was already in court. It was not a decision taken after proper

consideration before she had been called as a witness.

If a witness is competent but not compellable, she should, said Nepgen J, be informed by the prosecutor of her rights before being called as a witness, and this fact should be placed on the record at the outset of the proceedings.

The judicial officer should, in any event, ascertain whether the witness is aware of the provisions of s 195(1) in such cases. If the section is brought to the attention of the witness for the first time when she is called to testify, she should be afforded an opportunity to come to a decision after proper consideration.

In this case, then, the magistrate should, at least, have adjourned the matter to give the appellant’s wife an opportunity to make a considered decision. The magistrate had committed a serious misdirection in failing to investigate the circumstances under which she had come to testify and by permitting her to continue giving evidence after she had indicated that she would not have testified at all had she been aware of her rights.

The court pointed out, too, that the privilege was that of the spouse, not that of the accused. The accused, then, has no role to play in the making of the decision by the spouse. But what did have to be considered was whether, in circumstances such as these, the

November 2015


appellant could be said to have been prejudiced by the misdirection. The court found that there had been such prejudice. It

arose by there being evidence before the court, upon which the prosecution had relied, which would not have been before the

court had the witness been told at the appropriate time of the privilege which she enjoyed.

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By COSTA DIVARIS

If you think you know tax administration law,

you haven’t read this newsletter.

Recent topics: Tax-compliance status Information-gathering

Information-gathering from ‘taxpayers’ Information-gathering from ‘persons’

‘Persons’ at an inquiry Search and seizure

Information-gathering: dramatis personae Who is a person?

On the trail of person The Interpretation Act

All ‘persons’ Partnerships as persons Persons in the tax Acts

Persons across the board Criminality

Dumb criminality Criminal investigation?

SARS as SAPS

An entirely different way of looking at the tax law.

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