Hon House Chairperson, hon members, Ministers and Deputy Ministers present here, allow me to present on behalf of the Standing Committee on Finance its report and recommendations on the protocol between the government of the Republic of South Africa and the government of the United Kingdom of Great Britain and Northern Ireland to amend the convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and on Capital Gains.
The amendments seek to strengthen the current and existing treaty agreements between the two countries and their respective nations. Key to these amendments is ensuring that the current agreements are in line with the international standards and comply with the South African dividend policy that will be effective from 1 April next year.
The amendments also seek to ensure that the article on the exchange of information is in line with international standards and practice and complied with by the two respective countries.
The amendments will also ensure that the current secondary tax on companies, is phased out gradually and replaced by a system that will ensure those dividends due to shareholders, either in the form of persons or companies, will be subjected to tax withholding of between 5% and 10%, depending on the size of investments.
This will, to a very large extent, address the habit of tax evasion and assist our respective governments in maximising revenue collection, particularly through the agencies that are responsible for revenue collection so that our respective governments would be in a better position to meet the demands and the expectations of our respective peoples.
Most importantly, the amendments are a clear determination and commitment by the international community to move towards fuller and full co-operation to eradicate tax evasion and tax havens in our respective countries.
In terms of section 231(2) of the Constitution, the committee recommends that the House approves the protocol between the government of the Republic of South Africa and the government of the United Kingdom of Great Britain and Northern Ireland to amend the Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and on capital Gains.
In conclusion, I would like to take this opportunity to thank members of the committee for working together in approving these recommendations to this House. Thank you. [Applause.]
There was no debate.
Protocol between the government of the Republic of South Africa and the government of the United Kingdom of Great Britain and Northern Ireland to amend the Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and on Capital Gains in terms of section 231(2) of the Constitution approved.
Agreement between the government of the Republic of South Africa and the government of the Republic of Kenya for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income in terms of section 231(2) of Constitution approved.