Mr Speaker, let me also take this opportunity to thank all the members that have participated in the debate, but also the committee for the work they have done in deliberating on this and the net effect of which is the product that is before us today, contrary to what hon Ambrosini thought was perhaps a waste of time. He seems not to understand how democracy works.
Given the uncertainty of the overall global economic market, these Bills, particularly the money Bill, seek to deal with revenue neutrality in respect of our tax base. An increase in taxes could adversely impact the economy, whilst a decrease could also have the effect that would lead to unsustainable fiscal deficits.
In particular, the two Bills before us have three main objectives: firstly, to reduce tax anomalies that hinder business activities that can be removed without any significant loss of revenue; secondly, to eliminate costly loopholes; and thirdly, to find win-wins between SA Revenue Services, Sars, and the taxpayers that reduce the administration and compliance costs.
As all the members that have spoken have indicated, particularly those that are in support of both the Bills, I do not want to go into all the details except to note that the shadow Minister of Finance, Mr Harris, criticised National Treasury at the beginning of his speech for making too many changes. However, at the end of his speech, he also criticised National Treasury for not making enough changes. Complemented by Mr Ross, who also raised the issue of a delay, they all lament the issue of creating an uncertain environment by overdeliberating on the issues.
The Bill that comes before the House, as Mr Ambrosini said, is a draft and it is the task of the committee of Parliament to deal with it and make sure that we come up with the product that we came up with. Once again, we thank members for the work that they have done. It is your product that we are about today. One of the highlights of the Tax Administration Laws Amendment Bill is the issue of the implementation of the one-stop border posts, which seeks to give effect to the agreement which was concluded in September 2007, and the issue has since been confirmed by the committee. This provision will give effect to the agreement and its annexures in domestic law for all border functions once the requirements of section 231 of the Constitution have been complied with, and the agreement binds South Africa. One-stop border posts in terms of this agreement and other future agreements will speed up legitimate passenger and trade flows across our borders with the neighbouring countries.
Amongst other changes, is the issue of the introduction of the six-monthly filing of employee tax and VAT returns for micro businesses. I think this will be a relief to the small businesses, but it will require a degree of self-discipline to which members have also alluded.
Mr Speaker, the issue of the professionalising of tax practitioners is critical, and I agree with Mr Ross that they need to be professionalised. We also need to make sure that they are not allowed to behave in an unscrupulous manner, which would be to the detriment of taxpayers without recourse.
One of the win-win initiatives is the proposed legislation that triggers mark-to-market taxation for banks and brokers in respect of financial instruments. The proposed regime seeks to impose tax for annual increases and decreases in value, even if the financial instruments are fully retained. The proposed rules seek to merge financial accounting so as to simplify compliance and administration. The effective date of the regime has been deferred until 2014 in order to ensure that the new regime does not give rise to unintended avoidance and anomalies.
Mr Ross raised a point with regard to professional privilege. Accountants and others who are not lawyers take the position that, since the regulation of tax practitioners has commenced, a limited statutory privilege should be granted to them as is the case in other countries like Germany, New Zealand, and the United States of America. The departure point in considering this request is the public policy that a court and an administration should have the broadest possible access to information when deciding a matter so that the correct decision can be taken.
An exception to this access to information relates to information that is covered by legal professional privilege, which is a rare absolute common law right that originated in the UK in the 16th century. It protects communication between lawyers and their clients while obtaining legal assistance, which briefly stated the rationale for privilege, and which is to permit honest communication between the client and the legal advisor.
Hon members, the foundation of this rule is not difficult to discover. It is out of regard for the interest of justice, which cannot be upheld, and the administration of justice, which cannot go on without the aid of man skilled in jurisprudence and the practice of the courts. No similar privilege exists for communication with accountants, doctors, priests, and others. Internationally, if privileges are extended outside the legal profession, even on a limited basis, this is done by statute.
So, the question of whether to extend privilege in respect of tax advice is a contentious one. While some countries have done so, many have not. In 2011, Australia released a discussion paper on the matter which set out the arguments both for and against the extension.
Mr Speaker, I do not want to belabour the point as I have heard that most members support the Bill. I would also like to thank members and the committee once more for the work they have done. The power of democracy is at work. Thank you very much. [Applause.]
Debate concluded.