Chairperson, hon members of this august House, comrades and colleagues, the ANC is committed to the creation of a better life for all. That is the first point of departure, and professional and sustainable revenue collection is the principal device that the government through Sars must use to promote its growth of social and transformation.
Sars' user-friendly image accompanied by professional ethics has won the admiration of all South Africans. These approaches encourage existing taxpayers to honour their obligations whilst it seeks to broaden the net to those previously outside the tax system. Annually the Minister presents his Budget Speech which has tax implications.
This then requires Sars to compile its contents and present the proposal to this House, hence today we seek to endorse the Tax Laws Amendment Bill 2007. One thing about the ANC is that we put meaning in what we say. In the meantime this Bill seeks to help the lower levels of our society to comply with the tax regime without putting an extra burden on their hard-earned income.
Therefore the tax reform proposal is geared towards the poor and the vulnerable in our society, which is what the ANC is all about. Personal income tax relieves individuals as the Minster has already alluded to in this point. Those who earn less than R43 000 will not be paying tax. You remember in February 1996, only individuals earning less than R14 600 per annum where not required to pay tax. This is a 300% relief over a 12-year period aiming at alleviating hardships to our people. And again, this is what the ANC is all about. Tax on retirement funds has been repealed. Long- term savings for pension provident funds and individuals' retirement annuity can now expand free tax, thereby maximising the retirement benefits of the future retirees.
The total effect of these changes is that individuals, not intermediaries or financial institutions, will benefit from the retirement fund investments and the proceeds thereof. The new tax regime provides for lump sum payouts for retirees.
This legislation provides for the following: the first 300 lump sum will not be paying tax; 300 to 618%, 600 000 to 927% and the above 900 000 will be subjected to 36% and this applies to pensions from the retirement provident funds and other annuity funds.
The interest on dividends exemption for individuals below 65 will increase to R18 000, and this is up from R16 500, and for these above 65, as again the Minister has alluded to, to R26 000 from R24 500. Last year the amnesty for small businesses, including taxi operators was approved. This amnesty period has now been extended to 30 May and it was approved from 01 August 2006 until 31 May 2007.
To necessitate this extension, we therefore call upon our small businesses in particular, to optimally use this window of opportunity to apply for this amnesty. We were then assured that there will be no further extension in this regard.
Yingakho nje ngifisa ukukhuluma nabantu bakithi. Kukhona abantu lapha abakhuluma inkulumo eyize yokuthi mhlawumbe kukhona abafuna ukubanjwa. Sisebenze kanzima ngenkathi sicela ukuthi kube khona ukwelulwa kwesikhathi ngenhloso yokuthi abantu bakithi beze bonke. Kubalulekile ukuthi abantu babhalise amabhizinisi abo. Akekho umuntu ofuna ukubanjwa.
Sicela ukuthi osomabhizinisi bethu nezinhlangano zabo ezifana nabo-Nafcoc nabanikazi bamatekisi ukuthi beze bazofaka isicelo salo shwele ukuze baziwe ukuthi bakhona emabhukwini. (Translation of isiZulu paragraphs follows.)
[That is why I wish to talk to our people directly. There are people here who insinuate that this is done solely with the intention of defrauding people. We worked hard when we asked for the extension of tax amnesty so that all our people could come forward. It is important for people to register their businesses for tax. No one wants to defraud anyone here.
We request business people, including taxi owners and certain organisations like Nafcoc, to come forward and apply for this amnesty so that it can be known that they are in our filing system.]
In light of the above, we believe that the insinuation by some that because we have a tax overrun, we should consider corporate tax reduction is not supported. We believe that it will be irresponsible for a country where two economies exist. We should narrow the gap between the two economies.
Moreover, our corporate tax regime is compatible with our trading partners in both developed and developing countries, like for instance, New Zealand is 33%; Belgium is 33,9%; the USA is 40%, and Japan is 40%. Those are the developed countries while our developing partners, such as Argentina, are 35,9 %; Egypt is 40% and India is 35,9%.
We therefore argue that reducing it further will be very much out of line, considering the many challenges that the country is facing with regard to social economy transformation. This then remains on top of the agenda for the ruling party for we are of the opinion that this is what our people demand of us.
Siyavumelana lapha. [We agree on this one.]
Yes, people's lives hold equal value and this Bill seeks to achieve just that. Thanks for listening. I thank you.