Interest limitation kicks in

Buck stops here: The BURS plans to tighten collections in 2020
Buck stops here: The BURS plans to tighten collections in 2020

Some businesses can afford to have an early Christmas following the pronouncement by the Minister of Finance & Economic Development that micro, small or medium enterprises (SMMEs) and Variable Rate Loan Stock Companies (VRLSCs) will not have their interest expenses limited for tax purposes, effective July 1, 2019.

The pronouncement was made through a new piece of legislation cited as Statutory Instrument 58 of 2019 which was gazetted on December 6, 2019.

This follows the enactment in December 2018 of Income Tax Amendment Act No. 38 of 2018 which limited interest deductions for companies through a rather technical formula to 30% of what is called Tax EBITDA.

Editor's Comment
Micro-procurement maze demands urgent reform

Whilst celebrating milestones in inclusivity, with notably P5 billion awarded to vulnerable groups, the report sounds a 'siren' on a dangerous and growing trend: the ballooning use of micro-procurement. That this method, designed for small-scale, efficient purchases, now accounts for a staggering 25% (P8 billion) of total procurement value is not a sign of agility, but a 'red flag'. The PPRA’s warning is unequivocal and must be...

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