1. Standing Committee on Finance public hearings on the Draft Taxation Laws Amendment Bill, 2012 (22 August 2012) 1

2.  We made formal submission of our comments.  We will address only limited sections during this presentation. 2

3.  We are in agreement with the change of the definition of equity share as we are also of the opinion that the previous definition was linked to the Companies Act 61 of 1973 and the new Companies Act 71 of 2008 does not define equity shares. However the proposed amendment to the definition is now too limiting as it may lead to unintended consequences in Section 45 where shares are sold as redeemable preference shares that do specify the redemption period, but has a fixed dividend rate to their BEE partners. The proposed definition may lead to these entities regrouping their instruments to fit into this definition. 3

4.  Section 8F(1)(d) - We appreciate the Small business relief on the hybrid recharacterisation rules. However the total gross asset value not in excess of R10million is very low and fail to recognise different enterprise structures. A service provider has a different asset structure and need from that of a retail or manufacturing enterprise. 4

5.  Section 159 of the draft TLAB to amend section 21 of the Value-Added Tax Act.  We agree that debit note and credit note should be used to correct a previously issued tax invoice and the amendments are necessary. However, the addition of (f) allowing for when error or omission has occurred in respect of the particulars required under section 20(4) or (5) to be contained in a tax invoice is too broad. 5

6.  The debit note or credit note is intended to record the altering of a supply or consideration related to the supply (discount, consideration amount, return of goods, and cancellation of supply). Section 21 should not detract from the vendor’s requirement to issue a tax invoice as required in terms of section 20. 6

7.  A document issued as a ‘tax invoice’ should have at least a minimum requirement, and the credit or debit note must refer to such tax invoice, and as such the original tax invoice as issued in terms of section 20 should be at least in the currency of the republic, express “tax invoice” in a prominent place, have an individual serialized invoice number (important for auditing and referencing purposes) and the suppliers address and vat registration number. If these are not present, then the document issued is merely an ‘invoice’ as defined, and should not be regarded as a ‘tax invoice’ issued in terms of section 20. 7

8.  If the ‘tax invoice’ has not been issued, the provisions of section 21 cannot apply.  Therefore, we propose that paragraph (f) be limited to read “an error or omission has occurred in respect if the particulars required under section 20(4)(c), (4)(e), (4)(f), (4)(g), (5)(d), or (5)(e) to be contained in a tax invoice,” 8

9. Thank you 9