Overview of Taxation of Members of...
Transcript of Overview of Taxation of Members of...
![Page 1: Overview of Taxation of Members of Parliamentpmg-assets.s3-website-eu-west-1.amazonaws.com/docs/...Car hire –documentary proof & reason for hire Further Information and Assistance](https://reader034.fdocuments.net/reader034/viewer/2022042319/5f091cff7e708231d4254a9c/html5/thumbnails/1.jpg)
Overview of Taxation of Overview of Taxation of
Members of ParliamentMembers of Parliament
![Page 2: Overview of Taxation of Members of Parliamentpmg-assets.s3-website-eu-west-1.amazonaws.com/docs/...Car hire –documentary proof & reason for hire Further Information and Assistance](https://reader034.fdocuments.net/reader034/viewer/2022042319/5f091cff7e708231d4254a9c/html5/thumbnails/2.jpg)
GROSS INCOME
EXEMPTIONS
Tax Structure: The Reduction Formula
DEDUCTIONS
TAXABLE INCOME
![Page 3: Overview of Taxation of Members of Parliamentpmg-assets.s3-website-eu-west-1.amazonaws.com/docs/...Car hire –documentary proof & reason for hire Further Information and Assistance](https://reader034.fdocuments.net/reader034/viewer/2022042319/5f091cff7e708231d4254a9c/html5/thumbnails/3.jpg)
GROSS INCOME
EXEMPTIONS
DEDUCTIONS
�� Employment incomeEmployment income
�� Retirement incomeRetirement income
�� Passive incomePassive income
�� Business incomeBusiness income
Gross Income
DEDUCTIONS
TAXABLE INCOME
![Page 4: Overview of Taxation of Members of Parliamentpmg-assets.s3-website-eu-west-1.amazonaws.com/docs/...Car hire –documentary proof & reason for hire Further Information and Assistance](https://reader034.fdocuments.net/reader034/viewer/2022042319/5f091cff7e708231d4254a9c/html5/thumbnails/4.jpg)
GROSS INCOME
EXEMPTIONS
DEDUCTIONS
�� Interest and dividendsInterest and dividends
Exemptions
DEDUCTIONS
TAXABLE INCOME
![Page 5: Overview of Taxation of Members of Parliamentpmg-assets.s3-website-eu-west-1.amazonaws.com/docs/...Car hire –documentary proof & reason for hire Further Information and Assistance](https://reader034.fdocuments.net/reader034/viewer/2022042319/5f091cff7e708231d4254a9c/html5/thumbnails/5.jpg)
GROSS INCOME
EXEMPTIONS
DEDUCTIONS
�� Pension fund contributionsPension fund contributions
�� RAF contributionsRAF contributions
�� Income Protection PolicyIncome Protection Policy
�� Medical expensesMedical expenses
Deductions
DEDUCTIONS
TAXABLE INCOME
�� Business expenses Business expenses
against travel allowanceagainst travel allowance
�� Official expenses against Official expenses against
public office allowancepublic office allowance
![Page 6: Overview of Taxation of Members of Parliamentpmg-assets.s3-website-eu-west-1.amazonaws.com/docs/...Car hire –documentary proof & reason for hire Further Information and Assistance](https://reader034.fdocuments.net/reader034/viewer/2022042319/5f091cff7e708231d4254a9c/html5/thumbnails/6.jpg)
� Tax deducted on 80% of the allowance or 20% of the
allowance if employer satisfied that business use will
be 80% for the tax year.
� Travel reimbursement at a rate per km (official
travelling) – not subject to PAYE monthly but added
to the fixed travel allowance on assessment.
Travel Allowance
� On assessment, if-
� No claims made against the allowance – a tax liability will
arise in respect of the 20% of the allowance;
� 20% utilisation of the allowance – no liability will arise;
� Full utilisation or utilisation more than 20% of allowance –
result in credit.
![Page 7: Overview of Taxation of Members of Parliamentpmg-assets.s3-website-eu-west-1.amazonaws.com/docs/...Car hire –documentary proof & reason for hire Further Information and Assistance](https://reader034.fdocuments.net/reader034/viewer/2022042319/5f091cff7e708231d4254a9c/html5/thumbnails/7.jpg)
No claims substantiated:
Travel Allowance R100 000
Expenditure R 0
Taxable income on assessment R100 000
Tax on assessment (35%) R 35 000
Example: 80% subject to PAYE
PAYE on 80% of allowance R 28 000
Liability on assessment R 7 000
![Page 8: Overview of Taxation of Members of Parliamentpmg-assets.s3-website-eu-west-1.amazonaws.com/docs/...Car hire –documentary proof & reason for hire Further Information and Assistance](https://reader034.fdocuments.net/reader034/viewer/2022042319/5f091cff7e708231d4254a9c/html5/thumbnails/8.jpg)
Full utilisation of allowance:
Travel Allowance R100 000
Expenditure R100 000
Taxable income on assessment R 0
Tax on assessment (35%) R 0
Example: 80% subject to PAYE
Tax on assessment (35%) R 0
PAYE on 80% of allowance R 28 000
Credit on assessment R 28 000
![Page 9: Overview of Taxation of Members of Parliamentpmg-assets.s3-website-eu-west-1.amazonaws.com/docs/...Car hire –documentary proof & reason for hire Further Information and Assistance](https://reader034.fdocuments.net/reader034/viewer/2022042319/5f091cff7e708231d4254a9c/html5/thumbnails/9.jpg)
� Currently R120 000 p.a.
� Paid to cover the cost of certain expenditure
incurred by a Public Office Bearer in connection
with the duties of his or her Office
Public Office Allowance
with the duties of his or her Office
� 50% of allowance is subject to PAYE - monthly
![Page 10: Overview of Taxation of Members of Parliamentpmg-assets.s3-website-eu-west-1.amazonaws.com/docs/...Car hire –documentary proof & reason for hire Further Information and Assistance](https://reader034.fdocuments.net/reader034/viewer/2022042319/5f091cff7e708231d4254a9c/html5/thumbnails/10.jpg)
� On assessment, if-
� No claims against the allowance – tax liability will
arise in respect of 50% of the allowance not subject
to tax on the monthly basis;
� 50% utilisation of allowance – no tax liability on
Public Office Allowance
� 50% utilisation of allowance – no tax liability on
allowance will arise;
� Full utilisation of allowance – PAYE on the 50% of the
allowance taxed will create a credit.
![Page 11: Overview of Taxation of Members of Parliamentpmg-assets.s3-website-eu-west-1.amazonaws.com/docs/...Car hire –documentary proof & reason for hire Further Information and Assistance](https://reader034.fdocuments.net/reader034/viewer/2022042319/5f091cff7e708231d4254a9c/html5/thumbnails/11.jpg)
50% utilisation of allowance:
Public Office Allowance R120 000
Expenditure R 60 000
Taxable income on assessment R 60 000
Tax on assessment (35%) R 21 000
Example
Tax on assessment (35%) R 21 000
PAYE on 50% of allowance R 21 000
Liability on assessment R 0
![Page 12: Overview of Taxation of Members of Parliamentpmg-assets.s3-website-eu-west-1.amazonaws.com/docs/...Car hire –documentary proof & reason for hire Further Information and Assistance](https://reader034.fdocuments.net/reader034/viewer/2022042319/5f091cff7e708231d4254a9c/html5/thumbnails/12.jpg)
Expenditure in the course of the duties connected to the
holding of Public Office:
� Subsistence of R276 per day (for meals and accidentals costs) away from
home or R85 for incidental costs only.
� Secretarial fees
Public Office Allowance: Allowable Claims
� Stationery, postage and duplicating costs
� Telephone not reimbursed by Parliament
� Hire & maintenance of an office
� Hire of vehicles not reimbursed by Parliament
![Page 13: Overview of Taxation of Members of Parliamentpmg-assets.s3-website-eu-west-1.amazonaws.com/docs/...Car hire –documentary proof & reason for hire Further Information and Assistance](https://reader034.fdocuments.net/reader034/viewer/2022042319/5f091cff7e708231d4254a9c/html5/thumbnails/13.jpg)
In order to claim against the
allowance you will need to keep
the following records:
Importance of Record Keeping
![Page 14: Overview of Taxation of Members of Parliamentpmg-assets.s3-website-eu-west-1.amazonaws.com/docs/...Car hire –documentary proof & reason for hire Further Information and Assistance](https://reader034.fdocuments.net/reader034/viewer/2022042319/5f091cff7e708231d4254a9c/html5/thumbnails/14.jpg)
Where you travel away from home on official business an
amount of R276 per day may be claimed for meals and
incidental expenditure.
Provide a schedule showing:
Subsistence Allowance
Provide a schedule showing:
� Dates away from home
� Destination
� Reason for trip
![Page 15: Overview of Taxation of Members of Parliamentpmg-assets.s3-website-eu-west-1.amazonaws.com/docs/...Car hire –documentary proof & reason for hire Further Information and Assistance](https://reader034.fdocuments.net/reader034/viewer/2022042319/5f091cff7e708231d4254a9c/html5/thumbnails/15.jpg)
� Documentary proof of any
amount paid to an agency
� In the case of an individual:
� Full names
Secretarial Services
� Full names
� Residential address
� Identity number
� Description of duties
� Amount of time on duties
� Where duties are carried out
� Amount paid
![Page 16: Overview of Taxation of Members of Parliamentpmg-assets.s3-website-eu-west-1.amazonaws.com/docs/...Car hire –documentary proof & reason for hire Further Information and Assistance](https://reader034.fdocuments.net/reader034/viewer/2022042319/5f091cff7e708231d4254a9c/html5/thumbnails/16.jpg)
A schedule of amounts claimed.
Documentary evidence must
Stationery, Postage and Photocopies
Documentary evidence must
be available on request.
![Page 17: Overview of Taxation of Members of Parliamentpmg-assets.s3-website-eu-west-1.amazonaws.com/docs/...Car hire –documentary proof & reason for hire Further Information and Assistance](https://reader034.fdocuments.net/reader034/viewer/2022042319/5f091cff7e708231d4254a9c/html5/thumbnails/17.jpg)
� Statement of full accounts for telephone, mobile and fax.
� Amounts reimbursed by Parliament.
� Statement declaring percentage of private use.
Telephone
Documentary evidence must
be available upon request.
Only amounts not
reimbursed will be allowed.
![Page 18: Overview of Taxation of Members of Parliamentpmg-assets.s3-website-eu-west-1.amazonaws.com/docs/...Car hire –documentary proof & reason for hire Further Information and Assistance](https://reader034.fdocuments.net/reader034/viewer/2022042319/5f091cff7e708231d4254a9c/html5/thumbnails/18.jpg)
� This may not be a party office but a constituency office
and may not be situated in the members home.
� The following information must be provided:
Hire and Maintenance of Office
� Address of the office
� Name of entity to whom rental is paid
� Details of amount claimed
Documentary evidence must
be available on request
![Page 19: Overview of Taxation of Members of Parliamentpmg-assets.s3-website-eu-west-1.amazonaws.com/docs/...Car hire –documentary proof & reason for hire Further Information and Assistance](https://reader034.fdocuments.net/reader034/viewer/2022042319/5f091cff7e708231d4254a9c/html5/thumbnails/19.jpg)
� This could include toll or parking
fees, driver’s salary, taxes or hire of
vehicles.
� Records to be provided:
Use of Hired Vehicles
� Schedule showing expense claim
� Driver’s salaries – name and ID no
� Car hire – documentary proof &
reason for hire
![Page 20: Overview of Taxation of Members of Parliamentpmg-assets.s3-website-eu-west-1.amazonaws.com/docs/...Car hire –documentary proof & reason for hire Further Information and Assistance](https://reader034.fdocuments.net/reader034/viewer/2022042319/5f091cff7e708231d4254a9c/html5/thumbnails/20.jpg)
Further Information and Assistance
Name Position Phone Email Mobile VIP Unit
Ms BL Ferguson Team Leader 021-464 6181 [email protected] 083 555 4543 Cape Town
Ms CM Morgan Consultant 021-464 6172 [email protected] 083 555 4497 Cape Town
Ms ZS Wicomb Consultant 021-464 6182 [email protected] 082 413 8870 Cape TownMs ZS Wicomb Consultant 021-464 6182 [email protected] 082 413 8870 Cape Town
Ms VP Dinwayo Team Leader 012-422 5107 [email protected] 083 300 0108 Pretoria
Ms MS Alberts Consultant 012-422 5106 [email protected] Pretoria