Government postpones implementation of new tax law
The government has seemingly bowed to pressure from unions and has put on hold a law that would force workers to preserve their retirement savings.
Following significant pressure from trade unions, specifically the African National Congress-aligned Congress of South African Trade Unions (Cosatu), government has agreed to delay the implementation of the country’s new tax law.
Briefing journalists on Thursday following the fortnightly Cabinet meeting on Wednesday, Minister in the Presidency Jeff Radebe said government would be meeting with critics of the Taxation Laws Amendment Act, which include ANC alliance partner, Cosatu, for further consultations.
“It is apparent that despite the extensive consultation processes which were embarked upon before the law was passed that those concerns still exist and that those concerns have to be addressed urgently to ensure that when the law commences the changes to the provident fund benefits will be implemented smoothly and efficiently.
“For that reason, Cabinet has decided to table a legislative amendment to the Taxation Laws Amendment Act as a matter of urgency to postpone the commencement date from 1 March 2016 to 1 March 2018 to allow for further consultation with all key stakeholders,” said Radebe.
The new law, which would have come into effect on March 1 this year, would force workers to preserve their retirement savings, instead of cashing it in.
Radebe denied that Cosatu had put pressure on Cabinet.
“Cosatu does not have to rubberstamp decisions of Cabinet. The reason for these amendments that is being put forward is that they have raised concerns about the process of consultation,” he said.
“There had been consultations but it does appear that the consultation was not effective.”
Radebe said when President Jacob Zuma enacted the legislation, he was unaware of the concerns with the bill.
“When he signed this into law, he was not aware that there has been this concern from Cosatu because it was brought after he had signed it.” – African News Agency (ANA).