This archive report was first published on 25 June 2020.
On June 25, 2020, the National Treasury proposed reducing incentives for companies listing securities in the Finance Bill.
The Treasury is pushing to charge tax on all expenses incurred in listing, which could make it more expensive for firms to list on the stock exchange.
Currently, firms intending to list deduct expenses from income before being subjected to income tax, reducing tax obligations.
However, the Finance Bill is reintroducing provisions that were rejected in April, when the Tax Laws (Amendment) Bill was brought before Parliament and passed as part of strategies aimed at coping with the Covid-19 pandemic.
According to the Finance Bill, the Treasury hopes to convince legislators that they were wrong to reject the provisions earlier.
Deloitte Consulting, an auditing and financial advisory firm, said in an analysis that the reintroduction of the bill could be out of the conviction that the incentive was no longer necessary given that listing companies already benefit from exemption from capital gains.
