Thank you, Chairperson and hon members. Since the first Budget Speech in Parliament on 22 June 1994, the new ANC government has made a commitment to investigate virtually every aspect of the South African tax regime against the backdrop of the political, social and economic goals of the incumbent government. One of its key commitments was to close loopholes within the tax regime by introducing timeous legislation.
My colleagues have already alluded to most issues regarding this Bill. I will only touch on one aspect, which was omitted, which is port infrastructure depreciation. The new and unused port infrastructure will be eligible for a write-off of 5% per annum. This means that the port infrastructure will have a lifespan of 20 years and beyond.
With regard to the depreciation of environmental fixed assets, a taxpayer will be allowed a deduction of 40% of the costs of acquiring environment treatment and the resettling assets from the taxpayer's income in the year of assessment that the asset was brought into use. A further 20% should be deducted in each succeeding year of the assessment.
An amendment proposed on the company re-organisation is provided in clauses 41-47 of the Bill. The purpose of this amendment is to repeal the financial instrument limits from domestic re-organisation provisions. The financial instrument will be retained for foreign assets.
We in the ANC feel that an effective tax system that is perceived to be fair and legitimate is a prerequisite for building a prosperous and stable society. Given the challenge of the Reconstruction and Development Programme, it is essential that South Africa has in place both a revenue- raising and an expenditure policy that are capable of meeting the demands of the future and putting South Africa on a growth path that is sustainable and equitable and creates jobs.
The ANC does not view taxation policy in isolation, but as part of the broader revenue-raising policy, which is in turn integrally linked to the government expenditure policy and favours an approach to taxation that rests on the three pillars of sound macro-economic management, a comprehensive system of the contract of fiscal responsibility.
The ANC favours a broad comprehensive tax base as a narrow tax base inevitably favours certain forms of income and certain goods or services over others. This makes the system unfair as it favours those taxpayers who are able to take advantage of tax-advantaged forms of income over others. It also makes the system inefficient as it creates distorted incentives for taxpayers to take income in other forms and distort their labour savings and consumption decisions to take advantage of tax deferentials.
Broadening the tax base promotes efficiency by closing loopholes and enabling the reduction of tax rates. The ANC aims for a tax that meets the following objectives: It must be transparent, fair and perceived to be so by the taxpayers themselves. It must raise revenue in a cost-effective manner. It must levy taxes as efficiently as possible with minimum distortion. The tax system must distribute the tax pattern equitably according to the taxpayer's ability to pay and the tax system must support economic growth.
One of the ANC's most important considerations in devising the tax regime is the tax system that must support economic growth. This principle must be seen within the broader imperative of ensuring that such growth and benefits of economic prosperity are shared amongst all South Africans.
The tax relief thus given to small business, which includes co-operative banks, is aimed at promoting the use of services of these banks by lowering the tax burden and administrative costs and thus ultimately the costs are passed on to members through the bank fees. We all know about the charges of banks which keep on escalating all the time. This developmental thrust is found throughout the Bill, as I have mentioned, and it aims at increasing the tax exemption for work-related debt and disability benefit as well as those aimed at promoting the development of amateur sports.
The tax regime we seek to achieve ...
... sikholwa ukuthi izosiza kakhulu ikakhulukazi ekudonseni osomabhizinisi bethu ukuthi babe yingxenye enkulu ekwakheni umnotho wezwe lakithi. Kusiphatha kabi kakhulu ukubona abantu abamnyama ezindaweni ezifana noSoweto, KwaMashu, e-Claremont naseMlazi amabhzinisi abo efa. Sikholwa-ke ukuthi ... (Translation of isiZulu paragraph follows.)
[... we believe would help especially in attracting our business people to play a big part in creating the economy of our county. It saddens us to see our people's businesses in places like Soweto, KwaMashu, Claremont and Umlazi go under. We believe that ...]
... the tax regime that we are seeking to achieve ...
... izosisiza ekutheni laba bantu bethu ababukeka ... [...will help those people who seem to be ...]
... outside of the economic mainstream ...
... bazobuya beze neno ngoba inqubomgomo yethu yentela isiza ukuthi ingahlali kakhulu emqaleni kubona ... [ ... to be included because our tax policy helps to relieve them from paying more...]
... and by so doing we hope that this will promote the economic integration ...
... ezosiza ukuthi abantu bakithi babe yingxenye ezweni nasekwakheni umnotho wezwe lethu. Yingaleso sizathu uKhongolose eseka lo Mthethosivivinywa. Ngiyabonga. [Ihlombe.] [... which will help our people to be part of this country and grow the economy of our country. It is for this reason that the ANC supports this Bill. Thank you. [Applause.]