Resumo

THAMBI, K.. Mining companies attain relief through deductions on infrastructure relating to Social and Labour Plans: a case of the cart before the horse?. J. S. Afr. Inst. Min. Metall. [online]. 2019, vol.119, n.5, pp.479-483. ISSN 2411-9717.  http://dx.doi.org/10.17159/2411-9717/61-132-1/2019.

A recent amendment to Section 36(11)(e) of the Income Tax Act, 53 of 1968 (Tax Act) now extends the allowable deduction of 'capital expenditure' incurred by mining companies pursuant to the Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA). In terms of the Taxation Laws Amendment Bill 2016 (TLAB 2016), the allowable deduction has been extended to include expenditure incurred on infrastructure in terms of Social and Labour Plan (SLP) requirements as per the MPRDA. Interestingly, what necessitated the amendment was the need to recognize SLP requirements and to circumvent administrative difficulties for mining companies and the South African Revenue Services (SARS) in differentiating the use of developmental infrastructure by employees or the community. The successful implementation of such a deduction hinges on a sound SLP system. However, given the challenges within the current SLP system, this amendment could be considered somewhat premature.

Palavras-chave : Social and Labour Plan; capital expenditure; infrastructure; tax relief.

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