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Moneyweb reports that the future of employee share schemes seems to be in the balance if proposals in the latest draft Taxation Laws Amendment Bill go through.
Tax experts have warned that the proposed changes, where almost any amount received by a taxpayer in respect of these schemes will be taxed as ordinary income, will tear up existing financial models and sink many schemes. From 1 March next year all distributions (all dividends and all returns of capital) on restricted equity instruments will be taxed at revenue rates. Deloitte Tax Associate Director Jaco la Grange commented that the viability of many of the broad based schemes was now in question. “The main concern is the retrospective nature of the legislation and the effect it will have on legitimate older schemes which aimed at empowering employees,” said La Grange.
- Read this informative article by Amanda Visser in full at Moneyweb
Get other news reports at the SA Labour News home page