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What 2020 meant for the world of tax

As a new year dawns, we reflect on some of the significant highlights (and lowlights) of the 2020 tax year and look ahead at how it will influence 2021.

Legislative amendments

Several significant amendments to tax legislation have been tabled in the current year, including:

  • Changes to how when taxpayers can be criminally held liable for certain tax defaults;
  • Narrowing the scope of exempt bursaries and scholarships received by employees;
  • Additional anti-avoidance provisions relating to interest-free loans to trusts;
  • Changes to rules around the access to retirement funds upon emigration; and
  • The introduction of export levies on scrap metal.

Relief, relief and… no more relief

The relief granted by the government on payment of provisional taxes and payroll taxes to accommodate the economic turndown because of Covid-19 was short-lived. Many taxpayers that made use of the relief find themselves in a position unable to make good on deferred payments and find themselves indebted to SARS. This makes one wonder about whether the tax system is the best avenue to address economic shake-ups.

(Not so) New Commissioner

Commissioner Edward Kieswetter has made significant strides in restoring service levels at the Revenue Service since his appointment in 2019. Through his well-received interactions with the media, he has hinted that the use of technology in ensuring tax compliance is a priority at SARS. Practitioners and taxpayers alike should welcome the approach.

Significant judgments

Tax laws keep on developing through our courts, and in 2020, there have again been milestone judgements. It is not often that the Constitutional Court delivers judgement in a tax case – this has only happened in a handful of previous cases.

In the case of Big G Restaurants v SARS, the Constitutional Court delivered judgement in July. The substance of the matter (relating to specific allowances) was less intriguing than the consideration of the jurisdiction of the (Constitutional) Court in tax matters. The majority of the court held that where a point is of general public importance, the Constitutional Court should have jurisdiction over the matter.


As with most gatherings in 2020, the bulk of tax conferences were held electronically during 2020. The South African Institute of Tax Professionals was at the forefront in this regard and presented the Tax Indaba and a host of other seminars over alternative platforms.

What can be expected in 2021?

Undoubtedly, tax collection will be under pressure. And while there is always scope to increase taxes, Minister Mboweni will be wary of tax morale in the country and that the (ever-shrinking) tax base simply cannot afford an increased load. An increase in VAT is also unlikely – VAT is a consumption tax, and in a subdued economy where there is no spend, no increase in the VAT rate will contribute significantly to the fiscus.

So where will the money come from? There has, for a long time, been mooted at the prospect of wealth taxes and potential “once-off” levies. Tax practitioners are anxiously waiting on the February budget to see where we are headed from a tax policy perspective, and we are likely to see a few startling changes in the new decade.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.

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