Modern Mining March 2020

Botha adds that companies in the mining sector should note that aside from the proposals regard- ing the capital expenditure allowance, the Budget Review also proposes changes regarding the tax administration issues applicable to South Africa’s mining royalty tax legislation. In conclusion, De Jager says careful drafting and consultation with industry will need to take place. Furthermore, the impact of any amendments to sec- tion 36(11) will need to be considered in the context

of the remainder of the sections of the Income Tax Act that deals with the tax treatment for mining com- panies, for example, rehabilitation. “In addition, we will need to see whether amend- ments could be made to the Mineral and Petroleum Resources Royalty Administration Act in respect of the liability for Royalty Tax. Generally, the person who extracts and recovers the mineral resource is liable for the registration and payment of mineral roy- alty,” concludes De Jager. 

The Benhaus judgement changed the tax landscape for contract miners.

feature

March 2020  MODERN MINING  41