Deputy Speaker, hon members, it gives me great pleasure to introduce the Taxation Laws Amendment Bill for 2007. The Bill enacts some of the main tax policy changes that we announced in the Budget Speech in February this year. Amongst other things, the Bill contains measures to assist individuals, with a special emphasis on savings. The Bill also seeks to assist small businesses by extending the small business tax amnesty by a further period. Given the continually growing economy and administrative efficiency of the SA Revenue Service, government is once again able to provide individuals with across-the-board personal income tax relief. At the low end, income up to R43 000 a year will now be tax-free, instead of the former threshold of R40 000. The 18% bracket now ends at R112 500, instead of the previous threshold of R100 000. At the top end, the 40% rate now kicks in for taxable incomes above R450 000 instead of R400 000, where it had been hitherto. The net result is that over R8,8 billion of personal income tax relief will be granted by the passage of this legislation.
However, some of the most notable changes have come in the area of savings. First and foremost, the tax on retirement funds is being repealed; long- term savings for pension provident funds and individual retirement annuities can now grow tax-free so as to maximise the savings' nest eggs of future retirees.
Outside this process, it should also be noted that the National Treasury is simultaneously undertaking regulatory reform so that this savings nest egg ultimately works to the benefit of hard-working individuals, not to the benefit of intermediaries and financial institutions. So, a range of measures has been introduced as part of this.
In respect of the extension of small business tax amnesty, in the budget speech last year I announced that an amnesty for small businesses focusing, amongst other areas, on taxi operators would be introduced, and that was approved by this House. The amnesty application ran from 1 August 2006 to 31 May this year, and I had to speak to the chairperson of the portfolio committee to ask that we tweak the clock so that the 31 May deadline could run a bit longer than normal. The date of 31 May, for administrative purposes, ended at lunch time on Saturday, and I would like to express my appreciation to hon Nene for allowing us to deal with the administration of the amnesty in that way.
Now, when we introduced the amnesty last year, we thought that we'd get about 100 000 applicants; and members of this House who participated in the Budget Vote of the National Treasury in venue E249 on 24 May, would know that at that stage the number had reached 60 000. As a result of the arrangements we had made, we had received 275 398 applications for amnesty by lunch time on Saturday. It's clear that members of this House don't know the value of tax and tax-paying citizens, otherwise they would have given those who applied for amnesty a standing ovation, not us. [Applause.]
Earlier this week we met with some of the organisations that asked for extensions. We squeezed to try to get their participation out of the process going forward. Arising from that interaction and considering the overwhelming response from small businesses, I decided to ask Parliament to approve an extension of the deadline.
The Bill before this House therefore makes provision for one further month of extension to 30 June 2007. In addition, the Bill will allow us to have a further two months - to 31 August this year - to get applicants to submit all of their documentation that would support their applications for amnesty. I trust that the House will support this. We provided this rethink on the amnesty from a position of strength because of the overwhelming response from small businesses.
I'd also like to express my very sincere appreciation to the staff of Sars for their active participation over long hours and in many different parts of the country on the streets, engaging in discussions with people. It has been worth every bit of it.
I hereby table the Taxation Amendment Bill of 2007 as well as its companion, which is the Taxation Laws Second Amendment Bill of 2007 for consideration. Thank you. [Applause.]
Bill referred to the Portfolio Committee on Finance for consideration and report.