tax & jurisdiction
The South African National Assembly has passed a bill with the aim of encouraging unwilling investors to repatriate what is estimated to be many millions of dollars that have been put in offshore accounts over the past few decades. Under the terms of the Control Amnesty Bill, investors and their advisers will be exempt from either civil or criminal prosecution if they bring their assets back on shore. There will, however, be a 5% tax. Trusts will also be able to apply for the amnesty. The bill must now be considered by the National Council of Provinces.
In a seperate development, an error in the calculation of South Africa's consumer inflation figures could have had an adverse effect on the country's bond market.
According to local reports, the CPIX (consumer price index less mortgage costs) issued by the Statistic Council (SC) overstated inflation by as much as two percentage points. In May, the country's finance minister confirmed there had been an error.
Inflation has been progressively dropping since November 2002, when it stood at 12.7%. By March, the figure was recorded as 11.2%, but fell substantially a month later to 8.5%. Lower inflation beefs up interest rates, a scenario which bodes well for the bond markets.
The error was picked up by economists who warned that SC based its statistics using outdated rental income figures.
Six income tax band thresholds
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