A government-appointed study into the interrelationship between the Value Added Tax (VAT) Act, the Transfer Duty Act and the Stamp Duty Act has proposed delinking VAT and transfer duty. It suggested that both taxes could be imposed on all property transactions, with transfer duty being deductible for income tax purposes on business property. This would require a reduction in the transfer duty rates for natural and juristic persons.

Ide Louw, a tax manager at Cliffe Dekker, admitted to being confused about what the government was trying to achieve. He said the proposed delinking of the VAT and transfer duty acts would return to double taxation on transactions and could have a significant impact on smaller businesses.

Article on Business Report

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