Stamp Duties
19th January 2005
Mr P S Franck
Assistant General Manager – Indirect Taxes
South African Revenue Services
P O Box 402
PRETORIA 0001
Fax 012 422 5194
Dear Peter
AMENDMENTS TO STAMP DUTIES ACT, NO. 77 OF 1968
It is with extreme concern and disappointment that I need to write this letter on behalf of the property industry of South Africa.
You will recall from our meetings with you last year and also your presentation to us at our Property Executive Programme in Kwa-Zulu Natal, that we believed that you wanted to collect the monies owing to SARS on the stamp duty on leases but that you were not looking to in any way increase the stamp duty but rather to simplify the collection thereof to the benefit of all concerned.
However, I must point out that the average lease on commercial property is between 3 and 5 years, and that the stamp duty was 25 cents per R100 and its now become 50 cents per R100. On the other end of the scale where the limitation of the amount on which duty is payable to full selling value was removed; this has become an enormous negative due to the fact that if for example a lease was a 15 or 20 lease, there was a cap to the amount of stamp duty that was payable. However, with the new amendment, there is no capping and obviously many investments in property will not be viable and therefore in so doing will really hamper the development of commercial property in South Africa. The amendments you have made will obviously also have a detrimental effect on the Smme’s and PDI’s.
The above examples are to point out some of the impact this amendment will have on the property industry. We were under the distinct impression that we would hold a workshop with yourselves in order to work through the various areas which were of concern to the industry and I believe, if we had held this workshop, we would have come up with a very viable, credible and responsible solution for your stamp duty amendments.
It is with the utmost respect that I wish to request a meeting with you, the relevant management at SARS as well as the Minister, in order that we may discuss this very serious concern that we as an industry body have with regard to this stamp duty amendment.
We believe that with reasonable and responsible dialogue, that this whole amendment can be rectified to the benefit of all concerned.
Yours sincerely,
Brian Kirchmann
Chief Executive Officer
cc:
Mr Prakash Mungray, SARS
Minister Trevor Manuel
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