Hon Speaker, hon Ministers and hon members, as well as guests, let me indicate that since its inception our developmental state has intervened decisively in the economy with a progressive agenda meant to tackle the triple challenge of poverty, inequality and unemployment. At the centre of all these interventions is the clarion call that "the people shall share in South Africa's wealth!"
Hitherto, this task has been performed with great success through fiscal policy, mainly through progressive and redistributive taxation. As confirmation of the testimony by the masses of our people to the effectiveness of our taxation system, the World Bank's recently released report on our country's economic update confirms that much progress has been made since the end of apartheid in 1994. Amongst other things, this report attributes progress to tax used as part of a development programme to alleviate poverty and inequality.
Acknowledging that taxes on their own are not adequate to address the challenges at hand, it is of concern that current taxation amendments take place under difficult economic conditions, putting more pressure on taxation decisions.
Prospects continue to be for a slow, uneven and fragile strengthening of the global recovery. Locally, growth momentum has faded progressively since 2011. Domestic factors, particularly industrial action and constraints related to electricity and transport infrastructure, as well as skills shortages, have played a major part in the economy's lacklustre performance.
In order to comfortably navigate this economic environment of limited choices, the three Bills presented to the House give effect to the most appropriate amendments.
The Rates Bill gives effect to the tax rates and monetary threshold changes announced in the budget, relating to income tax, customs duties and excise duties. It enacts tax proposals that take effect on 1 April of every year and deals with numerical adjustments. I must indicate that this Bill does not deal with new substantive changes in our law.
The Taxation Laws Amendment Bill gives effect to the tax proposals contained in Chapter 4 and Annexure C of the Budget, and deals with more substantive changes to the tax law. Changes to the tax law normally take effect in the year following that in which the Bill has been passed into law. The Tax Administration Laws Amendment Bill enacts the administrative proposals contained in the Budget Review.
The main legislative amendments this year include, amongst others, firstly, legislative changes to allow for the introduction of tax-free savings accounts, which will go a long way in promoting the much required culture of saving in our country. Secondly, there is an extension to the effective date of the retirement reform proposals, from 1 March 2015 to 1 March 2016. Although we agreed that these reforms were relevant, recent public reactions have necessitated the extension. Our democratic and caring government should at all times listen to its constituents.
Thirdly, there is aligning the taxation of company cars across all industries - this will enhance opportunities for the realisation of equal treatment among taxpayers. This is a very basic tax principle.
Fourthly, there are the refinements to the excessive interest limitation rules for companies. Inter alia, this will amplify our efforts to combat transfer pricing, a buzz concept used as a mantra by some in this House as they strive to deal with their political identity deficiency problem.
Fifthly, there is improving certainty and clarity in relation to the research and development tax incentive and the special economic zone tax initiative.
Sixthly, there are increases in the thresholds for participants in the venture capital company regime. The seventh is an extension to the potential removal of the value-added tax zero rating of the supply of certain intermediate agricultural and farming supplies. This is meant to eliminate the rampant abuse of this provision by some unpatriotic farmers which has been observed.
Finally, there is the removal of the notional input VAT that may be claimed by VAT vendors when purchasing precious metals from non-VAT vendors. This change is meant to discourage accrual of the fraudulent input tax deduction currently prevalent as a result of this provision.
Indeed, our responsibility to act in unity, duty-bound to protect the livelihoods of the poor and enhance the welfare of our people with care and forethought, is greater than ever. Hence our submission that the House approves these three Bills.
Ke a leboga, Mmusakgotla. [Thank you, Chairperson.] [Applause.]