Notably, changes are proposed in relation to the granting of interest free loans to trusts. These amendments seek to tax the difference between the official rate of interest and the actual interest charge that is levied. Interestingly, the amendments do not encompass the changes proposed by the Davis Tax Committee and it is still possible that there will be future amendments to the taxation of trusts.
There are a number of other amendments proposed for hybrid debt instruments and third party backed shares and parties to finance transactions should be aware that there are further restrictions imposed.
In addition, following the Budget Speech announcement that there will be taxation on sugar sweetened beverages, a policy paper was published on 8 July 2016. Consumers can now expect in terms of the policy paper an additional cost of 20% on the most popular soft drinks, such as Coca Cola. South Africa is not unique in its taxation on soft drinks and the policy paper outlines international benchmarks. It will be interesting to note the responses to this policy paper.