Dreaded tax law on interest relaxed


On July 26, 2019, the Minister of Finance & Economic Development published the much-anticipated relaxation of the Income Tax Act provisions which restricted 100% deductions of interest expenses for companies, much to the amusement of the corporate world.

The proposed amendment, published through Income Tax Amendment Bill 2019, comes after rigorous lobbying by business for the amendment of the recently introduced thin capitalisation law which was enacted on December 31, 2018.

The effect of the December 2018 law was to effectively limit interest expenses incurred by corporates as from July 1, 2019 as tax deductions. Previously, every company could claim 100% of its interest expense but the law limited it to 30% of what is known as Tax EBITDA, effectively increasing corporate tax.

Editor's Comment
CAF is a joke, but...

We are told of massive spin-offs for hosting countries, which we assume was the catalyst behind putting in the bid.We are not too sure if it is a one-size fits all, where any hosting nation reaps the benefits or it’s on a case-by-case basis.There are arguments from both ends, with hosting a sure way to accelerate infrastructure development and a guaranteed cash flow during the 30-days of the tournament.There is a bump in employment creation...

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