The Commissioner of Taxation in Australia, in his key-note address at the Atax Conference in Sydney this month, reiterated that taxpayers should pay their fair share of tax. In South Africa, our Commissioners in the past made similar calls on taxpayers.

Although it is expected that revenue authorities engage on this issue, the question is, what is really meant by this statement? In different political and economic jurisdictions, the meaning may differ substantially. On the one hand it may be a call to be compliant and pay no more than the law requires, and on the other hand it may be a socialistic call to pay an amount of tax that is affordable to the taxpayer, provided it is no less than what the law requires.

Either way, directors of companies may find themselves in a difficult position. Directors’ primary duty is to seek to maximise the wealth of shareholders. In seeking this goal, they must ensure they find and exploit manageable risks and opportunities. This task is made more difficult each year with increased regulation.

The fact that one of the primary duties of a revenue authority is to collect all revenue which is due, the statement to pay a “fair share of tax” is in essence a potential call to pay more tax than the law provides – thus taking it too far.

Yours truly,
Stiaan Klue

The European Commission has proposed to Member States a number of actions in support of Millenium Development Goals - including helping developing countries fight tax evaders and reduce the flight of taxable income from their shores.

In terms of s 8(1) of the Income Tax Act, the amount of a subsistence allowance to be taxed in your hands as an employee must be reduced by the costs that you incur on accommodation, meals and other incidental costs when you are obliged to spend at least one night away from your usual place of residence in the Republic by reason of your duties. But you must be away from home for at least one night for the subsistence allowance to be reduced by the qualifying expenses.

In February this year, the Minister of Finance announced that government will take steps to reduce tax avoidance and tax structuring by tightening company car and other fringe benefit rules, and through measures to ensure that employer deductions are fully reflected in the gross income of employees.

As part of its drive for better service, SARS has been modernising and simplifying tax processes over the past two years. The journey to high quality PAYE submissions started in 2008 with the introduction of a formalised filing season for employers, structured Adobe forms and, for the first time, SARS providing employers with the free e@syFile™ Employer application suite.

The Commissioner for the South African Revenue Service (SARS) announced the publication of the prescribed list of qualifying expenses relating to physical impairment or disability and the diagnostic criteria for of disability.

The OECD Committee on Fiscal Affairs invites public comments on draft changes to the Commentary on Article 17 of the OECD Model Tax Convention, which deals with cross-border income derived from the activities of entertainers and sportsmen. Comments on these proposed changes (which will not be included in the next update to the Model Tax Convention scheduled for approval in June 2010) should be sent before 31 July 2010 to Jeffrey Owens, Director, CTPA.

The OECD FTA periodically surveys member countries and selected non-member countries to assess revenue body progress with - and plans for - the deployment of modern electronic services in taxpayer service delivery. The latest survey report contains an extensive assessment of the use of modern technology to deliver modern electronic services.

Most revenue bodies have taken a unique approach to the selection & development of IT applications to support their business. Very little has yet been done to develop common solutions to common business needs. This report describes a capability model and explores the approaches, commercial solutions purchased or custom-built solutions developed, by twenty OECD FTA member countries against this capability model.

Reducing administrative burdens is a priority in many countries. This report by the OECD’s Forum on Tax Administration is based on a survey of 20 OECD member countries, describes the strategies, approaches and measures being used by tax policy makers and revenue bodies to achieve their burden reduction targets.