The National Council of Provinces passed the Adjustments Appropriation Bill today, at its last scheduled plenary sitting for 2017. It also passed six other Bills and agreed on two reports related to the 2017 Medium Term Budget Policy Statement.
The reports agreed were from the Select Committee on Appropriations. One was on the proposed division of revenue and conditional grant allocations to provincial and local government spheres. The other report was on the Proposed Fiscal Framework. Both matters were in the 2017 Medium Term Budget Policy Statement presented to Parliament in October.
Bills passed were the Rates and Monetary Amounts and Amendment of Revenue Laws Bill, the Taxation Laws Amendment Bill, the Tax Administration Laws Amendment Bill, the Insurance Bill, the Legal Practice Amendment Bill and the International Arbitration Bill. The National Assembly had passed these Bills and they were then referred to the National Council of Provinces for consideration.
The Rates and Monetary Amounts and Amendment of Revenue Laws Bill includes major tax changes announced in the 2017 Budget, most of which were implemented to raise an additional R28 billion in tax revenues to ensure the sustainability of the public finances. Tax changes in the Bill include the new 45% rate on taxable incomes above R1.5 million (effective from 1 March 2017), an increase in the dividend withholding tax rate from 15% to 20%, increases in excise duties on alcohol and tobacco, changes to transfer duties on property sales and increases in the medical tax credit. The Bill also includes introducing a Health Promotion Levy, involving a tax on sugar-sweetened beverages.
The Taxation Laws Amendment Bill deals, among others, with company tax exemptions for debt relief, foreign remuneration earned by South Africans and anti-tax avoidance measures. The Tax Administration Laws Amendment Bill includes measures to combat VAT fraud and a cumulative annual cap on deductible retirement fund contributions.
The Insurance Bill aims to promote maintenance of a fair, safe and stable insurance market. It seeks to do this by establishing a legal framework that enhances financial soundness through higher prudential standards, group supervision and stronger reinsurance arrangements. It also aims to increase access to insurance, to strengthen regulatory requirements on governance, risk management and internal controls for insurers and it aligns with international standards, while taking South Africa's specific conditions into account.
The Legal Practice Amendment Bill regulates, among others, the prescription of areas of jurisdiction of Provincial Councils, provides that only practicing legal practitioners may perform certain acts or provide certain services and further regulates the duties of banks concerning trust accounts.
The International Arbitration Bill provides for incorporating, into South African law, the Model Law on International Commercial Arbitration, as adopted by the United Nations Commission on International Trade Law. This will provide for recognition and enforcement of foreign arbitral awards, repeal the Recognition and Enforcement of Foreign Arbitral Awards Act of 1977 and amend the Protection of Businesses Act of 1978.