Regulatory Environment
Taxation
The South African tax system has changed from a source-based to a residence-based
system with effect from the 1 January 2001, in line with international trends.
This means that South African residents will be taxed on their worldwide income.
Non-South African residents will still be taxed on income from South African
sources subject to the double taxation agreements with the different countries.
The principle taxes imposed in South Africa are direct and indirect taxes:
- Direct Taxes include income tax, secondary tax on companies (STC), capital
gains tax (CGT) and donations tax.
- Indirect Taxes include value added tax (VAT), estate duty, stamp duties,
transfer duties on real estate, customs & excise duties, marketable security
taxes, skills development levies, municipal taxes on owners of real estate,
airport taxes & fuel levies.
For more information on taxation go to
www.sars.gov.za.
Competition and Regulatory Policy
South African authorities embarked on a major overhaul of competition policy,
which led to the formulation of a new policy, the Competition Act, 1998
(Act No. 89 of 1998). It seeks to achieve the following objectives:
- To promote the efficiency, adaptability and development of the economy;
- To provide consumers with competitive prices and product choices;
- To promote employment and advance the social and economic welfare of South Africans;
- To expand opportunities for South African participation in world markets and recognize
the role of foreign competition in the Republic;
- To ensure that small and medium-sized enterprises have an equitable opportunity
to participate in the economy;
- To promote a greater spread of ownership, in particular to increase the
ownership stakes of historically disadvantaged persons.
In meeting these objectives, it is focused on restricting anti-competition practices,
eliminating abuse of dominant positions and strengthening merger control.
Three institutions are created in terms of the Act to achieve the above objectives:
- The Competition Commission, which is independent but its decisions may be appealed
to the Competition Tribunal and the Competition Appeal Court;
- The Competition Tribunal, which has jurisdiction throughout South Africa and is
independent from the competition institutions; and
- The Competition Appeal Court, which has status similar to that of a High Court
and has jurisdiction throughout South Africa.
For more information on the Competition Commission go to:
www.compcom.co.za
For more information on the Competition Tribunal go to:
www.comptrib.co.za
Industrial Development Zones
The Industrial Development Zone (IDZ) programme is one of many incentives offered by
the dti to encourage international competitiveness of the South African
based manufacturing sector.
IDZs will be purpose-built industrial estates linked to an international port
or airport in which quality infrastructure and expedited customs procedures are
coupled with unique duty-free operating environments suited to export-oriented
production.
The IDZ will provide, inter-alia, the following benefits to IDZ / CCA enterprises:
- A Customs Controlled Area (CCA) with dedicated SARS Customs officials to
provide support with customs and excise requirements;
- Duty-free on imports of production-related raw materials including machinery
and assets to be used in production - with the aim of exporting the finished products;
- Zero-rating on VAT for supplies procured in SA;
- Accessibility to most government incentives that will contribute to
lowering the cost of production;
- A one-stop shop centre for all the necessary regulatory and documentation
preparations for an investor;
- World-class infrastructure that offers international best practice environment.
Government will license operators to develop and run the IDZs, provide
enterprise support measures, minimise red tape and provide efficient services
to enterprises within an IDZ. There are currently four IDZ in the country i.e.:
Coega IDZ Port Elizabeth (Eastern Cape)
www.coega.co.za
East London IDZ, East London (Eastern Cape)
www.elidz.co.za
Richard's Bay IDZ, Richard's Bay (KZN)
www.richardsbayidz.co.za
JIA IDZ, Kempton Park (Gauteng)
www.blueiq.co.za
Intellectual Property Rights
South Africa has a developed system of intellectual property law covering patents,
industrial designs, copyright and trademarks. It is also a signatory to most
of the international conventions in this field.
For more information on these topics, go to:
www.cipro.co.za.
Other Regulations
Environmental Regulations
In terms of Section 24 of the Constitution and the National Environmental
Management Act (NEMA), the dti is to take care that a sound balance is
maintained between environmental and socio-economic aspects in all policies,
plans, programmes and decisions, including the encouragement of investment,
granting of incentives and all other interventions.
the dti encourages existing industries to implement Cleaner Production (CP)
as an internationally adopted tool that incur savings, increase competitiveness
and elevates companies to higher levels of resource and energy efficiency.
the dti at the 2002 World Summit on Sustainable Development established
the National Cleaner Production Centre (NCPC), which implements CP in priority
sectors, focusing on textiles, agro-processing and chemicals. NCPC sector projects
are conducted in terms of TISA Customised Sector Programmes (CSP).
Labour Regulations
Details on Labour Regulations can be found be found on
www.labour.gov.za.
Exchange Controls
For Exchange Control regulations; go to the Reserve Bank's site by clicking on
www.resbank.co.za.
Financial Regulations
For more information on Financial Regulations, go to
www.fsb.co.za.
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