In the 2019 Budget presented by Minister Mboweni before
parliament on 20 February 2019, there are a number of changes that
are proposed which will ultimately affect business. While there are
no increases in the corporate tax rate (28%), capital gains tax
rates or value-added tax, it is likely that the introduction of the
new tax measures will significantly affect business.
It appears that there is a trend towards widening the scope of
the various identified anti-avoidance provisions contained in the
applicable tax legislation. Some of the identified abusive
behaviour on the part of taxpayers include:
Share buybacks
Taxpayers have been identified as abusing the newly introduced
amendments in 2018. These arrangements involve the target company
distributing a substantial dividend to its current company
shareholder and subsequently issuing shares to a third party. As a
result, the value of the current company shareholder's holding
in the shares of the target company
