Category: CHAPTER II – The Taxes (ITA)

Section 10(1)(nE) of ITA

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(nE)  any amount (including any taxable benefit determined under the provisions of the Seventh Schedule, but excluding any gain or loss as a result of any transaction in respect of which section 8C applies or the cancellation of any such transaction) received by or accrued to an employee, as so defined, under a share incentive scheme operated for the benefit of employees of the taxpayer’s employer, as so defined, which was derived –

(i)      upon the cancellation of a transaction under which the taxpayer purchased shares under that scheme; or

(ii)     upon the repurchase from the taxpayer, at a price not exceeding the selling price to him or her, of shares purchased by him or her under that scheme,

if in consequence of such cancellation or repurchase the taxpayer has not received or become entitled to receive any compensation or consideration other than the repayment of any portion of the purchase price actually paid by him;

Subsection 2 and 3 of section 8F of ITA

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(2)     Any amount that is incurred by a company or accrues to a person in respect of interest on or after the date that an instrument becomes a hybrid debt instrument is—

(a)     deemed to be a dividend in specie in respect of a share that is declared and paid by that company to the person to whom that amount accrued on the last day of the year of assessment of that company during which it was incurred;

(b)     not deductible; and

(c)     deemed to be a dividend in specie in respect of a share that accrues to that person on the date contemplated in paragraph (a).

[Subsection (2) amended by section 8 of Act 43 of 2014, substituted by section 16(1)(e) of Act 15 of 2016 and by section 11 of Act 17 of 2017, amended by section 14(1) of Act 23 of 2018 and substituted by section 8(1) of Act 20 of 2021 effective on the date of promulgation of that Act, 19 January, 2022 and applicable in respect of amounts incurred or accrued on or after that date]

(3)     This section does not apply to any instrument-

(a)     in respect of which all amounts are owed by a small business corporation as defined in section 12E(4);

(b)     that constitutes a tier 1 or tier 2 capital instrument referred to in the regulations issued in terms of section 90 of the Banks Act (contained in Government Notice No. R.1029 published in Government Gazette No. 35950 of 12 December 2012) issued-


(i)      by a bank as defined in section 1 of that Act; or


(ii)     by a controlling company in relation to that bank;

(c)     of any class that is subject to approval as contemplated in the-


(i)      Short-term Insurance Act in accordance with the conditions determined in terms of section 23(a)(i) of that Act by the Registrar defined in that Act, where an amount is owed in respect of that instrument by a short-term insurer as defined in that Act; or


(ii)     Long-term Insurance Act in accordance with the conditions determined in terms of section 24(a)(i) of that Act by the Registrar defined in that Act, where an amount is owed in respect of that instrument by a long-term insurer as defined in that Act;

[Paragraph (c) amended by section 16(1)(f) of Act 15 of 2016 effective on 1 January, 2017 and applicable in respect of years of assessment commencing on or after that date]

(d)     that constitutes a linked unit in a company where the linked unit is held by a long-term insurer as defined in the Long-term Insurance Act, a pension fund, a provident fund, a REIT or a short-term insurer as defined in the Short-term Insurance Act, if—


(i)      the long-term insurer, pension fund, provident fund, REIT or short-term insurer holds at least 20 per cent of the linked units in that company;


(ii)     the long-term insurer, pension fund, provident fund, REIT or short-term insurer acquired those linked units before 1 January 2013; and


(iii)    at the end of the previous year of assessment 80 per cent or more of the value of the assets of that company, reflected in the annual financial statements prepared in accordance with the Companies Act for the previous year of assessment, is directly or indirectly attributable to immovable property;

 

(e)     that constitutes a third-party backed instrument; or

[Paragraph (e) added by section 16 of Act 15 of 2016 effective on 1 January 2017, applies in respect of years of assessment commencing on or after that date]

(f)      that constitutes a hybrid debt instrument solely in terms of paragraph (b) of the definition of hybrid debt instrument if a registered auditor, as contemplated in the Auditing Profession Act, 2005 (Act No. 26 of 2005), has certified that the payment, by a company, of an amount owed in respect of that instrument has been or is to be deferred by reason of the market value of the assets of that company being less than the amount of the liabilities of that company.

[Paragraph (f) added by section 16 of Act 15 of 2016 effective on 1 January 2016, applies in respect of years of assessment commencing on or after that date]

“Qualifying equity share” definition of section 8B of ITA

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‘qualifying equity share’ in relation to a person means an equity share acquired in a year of assessment in terms of a broad-based employee share plan, where the market value of all equity shares (as determined on the relevant date of grant of each equity share and excluding the market value of any qualifying equity share acquired in the circumstances contemplated in subsection (2A)), which were acquired by that person in terms of that plan in that year and the four immediately preceding years of assessment, does not in aggregate exceed R50 000.

“Broad-based employee share plan” definition of section 8B of ITA

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(3)     For the purposes of this section –

‘broad-based employee share plan’ of an employer means a plan in terms of which –

(a)     equity shares in that employer, or in a company that is an associated institution as defined in the Seventh Schedule in relation to the employer are acquired by employees of that employer;

[Paragraph (a) substituted by section 10(1)(b) of Act 60 of 2008, by section 9 of Act 17 of 2017 and by section 7 of Act 34 of 2019]

(b)     employees who participate in any other equity scheme of that employer or of a company that is an associated institution as defined in the Seventh Schedule in relation to that employer are not entitled to participate and where at least 80 per cent of all other employees who are employed by that employer on a permanent basis on the date of grant (and who have continuously been so employed on a full-time basis for at least one year) are entitled to participate;

(c)     the employees who acquire the equity shares as contemplated in paragraph (a) are entitled to all dividends and foreign dividends and full voting rights in relation to those equity shares; and

(d)     no restrictions have been imposed in respect of the disposal of those equity shares, other than –

(i)      a restriction imposed by legislation;

(ii)     a right of any person to acquire those equity shares from the employee or former employee who acquired the equity shares as contemplated in paragraph (a) –

(aa)   in the case where the employee or former employee is or was guilty of misconduct or poor performance, at the lower of market value on the date of grant or the market value on the date of acquisition by that employer; or

(bb)   in any other case, at market value on the date of acquisition by that person; or

(iii)    a restriction in terms of which the employee or former employee who acquired the equity shares as contemplated in paragraph (a) may not dispose of those equity shares for a period, which may not extend beyond five years from the date of grant;

Subsection 4 and 4A of section 8 of ITA

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(4)

(a)     There shall be included in the taxpayer’s income all amounts allowed to be deducted or set off under the provisions of sections 11 to 20, inclusive, section 24D, section 24F, section 24G, section 24I, section 24J, section 27(2)(b) and section 37B(2) of this Act, except section 11(k), 11(n), 11(p) and (q), section 11F, section 12(2) or section 12(2) as applied by section 12(3), section 12A(3), section 13(5), or section 13(5) as applied by section 13(8), or section 13bis(7), section 15(a) or section 15A, or under the corresponding provisions of any previous Income Tax Act, whether in the current or any previous year of assessment which have been recovered or recouped during the current year of assessment:

[Words preceding the proviso substituted by section 9 of Act 31 of 2013 and section 8 of Act 17 of 2017 effective on 1 March 2016]

Provided that the provisions of this paragraph shall not apply in respect of any such amount so recovered or recouped which has been-

(i)      included in the gross income of such taxpayer in terms of paragraph (jA) of the definition of ‘gross income’;

(ii)     applied to reduce any cost or expenditure incurred by such taxpayer in terms of section 19; or

(iii)    previously taken into account as an amount that is deemed to have been recovered or recouped in terms of section 19(4), (5), (6) or (6A).

[Paragraph (a) amended by section 6(1)(a) of Act 90 of 1964, substituted by section 9(1)(a) of Act 88 of 1965, by section 10(1)(a) of Act 55 of 1966, by section 10(a) of Act 89 of 1969, by section 8(d) of Act 85 of 1974, by section 7(1)(b) of Act 69 of 1975, by section 7(1)(a) of Act 113 of 1977, by section 8(a) of Act 94 of 1983, by section 5(1)(b) of Act 121 of 1984, by section 6(f) of Act 85 of 1987 and by section 6(a) of Act 90 of 1988 and amended by section 17(1)(b) of Act 30 of 2000, by section 21(1)(a) of Act 60 of 2001, by section 6 of Act 32 of 2004, by section 6(1) of Act 8 of 2007, by section 5(1)(a) of Act 3 of 2008, by section 11(1)(b) of Act 17 of 2009, by section 16(1)(b) of Act 24 of 2011, by section 9(1)(b) of Act 22 of 2012, by section 9(1)(a) of Act 31 of 2013 and by section 8(1) of Act 17 of 2017 deemed effective on 1 March, 2016. Paragraph (iii) added by section 9(1)(d) of Act 31 of 2013 and substituted by section 6 of Act 20 of 2021]

(b)     For the purposes of paragraph (a), where during any year of assessment any actuarial surplus is paid to a taxpayer pursuant to the provisions of section 15E(1)(f) or (g) of the Pension Funds Act the taxpayer must be deemed to have recovered or recouped an amount equal to the amount of that actuarial surplus less any expenditure incurred by that taxpayer in respect of that actuarial surplus that was not allowed as a deduction during any year of assessment.

(c)     ……….

(d)     ……….

(dA)  ……….

(dB)   ……….

(e)     Notwithstanding paragraph (a), but subject to paragraph (eB), (eC), (eD) and (eE), there shall not be included in the income of a person any amount recovered or recouped as a result of the disposal of any asset, where that person has elected that paragraph 65 or 66 of the Eighth Schedule applies in respect of the disposal of that asset.

(eA)  Where a person acquires more than one asset (hereinafter referred to as “the replacement asset or assets”) contemplated in paragraph (e), that person must, in applying paragraphs (eB), (eC) and (eD), apportion the amount recovered or recouped to each replacement asset in the same ratio as the receipts and accruals from that disposal respectively expended in acquiring each replacement asset bear to the total amount of those receipts and accruals expended in acquiring all those replacement assets.

(eB)   Where a replacement asset in relation to an asset of a person as contemplated in paragraph (e) constitutes a depreciable asset, that person shall be deemed to have recovered or recouped in a year of assessment so much of the amount contemplated in paragraph (e) apportioned to that asset as contemplated in paragraph (eA) as bears to the total amount of the recovery or recoupment contemplated in paragraph (e) the same ratio as the amount of any deduction or allowance allowed in that year of assessment in respect of that replacement asset bears to the total amount of the deduction or allowance (determined with reference to the cost or value of that asset at the time of acquisition thereof) allowable for all years of assessment in respect of that replacement asset.

(eC)   Where a person during any year of assessment disposes of a replacement asset in relation to an asset contemplated in paragraph (e) and any portion of the recovery or recoupment which is apportioned to that replacement asset has not been included in the income of that person in terms of paragraph (eE) or (eD), that portion must be deemed to be an amount recovered or recouped by that person in respect of that replacement asset in that year of assessment.

(eD)   Where during any year of assessment a person ceases to use a replacement asset in relation to an asset contemplated in paragraph (e), in respect of which paragraph 66 of the Eighth Schedule applies, for the purposes of that person’s trade and any portion of the amount which is apportioned to that replacement asset has not been included in the income of that person in terms of paragraph (eE) or (eC), that portion must be deemed to be an amount recovered or recouped in that year of assessment.

(eE)   Where a person contemplated in paragraph (e) fails to conclude a contract or fails to bring any replacement asset into use within the period prescribed in paragraphs 65 or 66 of the Eighth Schedule, as the case may be, paragraph (e) shall not apply and that person must-

(i)     deem the amount contemplated in paragraph (e) to be an amount recovered or recouped for purposes of paragraph (a) on the date on which the relevant period ends;

(ii)     determine interest at the prescribed rate on the amount recovered or recouped from the date of the disposal contemplated in paragraph (e) to the date contemplated in subparagraph (i); and

(iii)    deem that interest to be an amount recovered or recouped for purposes of paragraph (a) on the date contemplated in subparagraph (i).

(f)      If as a result of the loss, sale or disposal in any other manner by the taxpayer of the further asset referred to in paragraph (e) there has accrued to or has been received by the taxpayer an amount in excess of the cost thereof less the amount referred to in the said paragraph, so much of the excess as does not exceed such last–mentioned amount shall (unless such last–mentioned amount has been included in income in terms of the proviso to the said paragraph) be deemed to have been recovered or recouped and shall be included in the taxpayer’s income for the year of assessment during which such further asset was so lost, sold or disposed of in addition to any recovery or recoupment referred to in paragraph (a).

(g)     ……….

[Paragraph (g) added by section 9 of Act 88 of 1965, amended by section 6 of Act 141 of 1992 and deleted by section 5 of Act 43 of 2014 effective on 12 December 2013]

(h)     ……….

[Paragraph (h) added by section 9 of Act 88 of 65 and deleted by section 5 of Act 43 of 2014 effetive on 12 December 2013]

(i)      ……….

[Paragraph (i) added by section 9 of Act 88 of 1965 and deleted by section 5 of Act 43 of 2014 effecive on 12 December 2013]

(j)      ……….

[Paragraph (j) added by section 9 of Act 88 of 1965 and deleted by section 5 of Act 43 of 2014 effective on 12 December 2013]

(k)     For the purposes of paragraph (a), where during any year of assessment any person has –

(i)      donated any asset;

(ii)  in the case of a company, transferred in whatever manner or form any asset to any holder of a share in that company;

[Sub­paragraph (ii) substituted by section 9(1)(g) of Act 31 of 2013 and amended by section 6(d) of Act 34 of 2019]

(iii)  disposed of any asset to a person who is a connected person in relation to that person; or

[Sub­paragraph (iii) amended by section 6(d) of Act 34 of 2019]

(iv)  commenced to hold any asset as trading stock which was previously not held as trading stock,

[Sub­paragraph (iv) added by section 6(d) of Act 34 of 2019]

in respect of which a deduction or an allowance has been granted to such person in terms of any of the provisions referred to in that paragraph, that person shall be deemed to have disposed of that asset for an amount equal to the market value of that asset as at the date of that donation, transfer, disposal or commencement.

[Paragraph (k) added by section 4(1) of Act 113 of 1993, substituted by section 7(g) of Act 19 of 2001 and by section 21(1)(b) of Act 60 of 2001, amended by section 11(1)(c) and (d) of Act 74 of 2002, substituted by section 5(b) of Act 20 of 2006 and amended by section 4(1)(b) of Act 23 of 2020 deemed effective on 15 January, 2020]

(l)      For the purposes of paragraph (a), where –

(i)      any person was entitled to a deduction in respect of any interest or related finance charges (including a discount or premium), which was incurred or deemed to have been incurred by such person in relation to any financial arrangement during any year of assessment and such interest or related finance charges were allowed as a deduction in terms of the provisions of this Act during such year of assessment in the hands of such person;

(ii)     such person has transferred such financial arrangement during any year of assessment to any other person; and

(iii)    any obligation or part thereof in respect of such interest or related finance charges which such person is legally liable to pay has, as a result of such transfer, been transferred to such other person,

such person shall be deemed to have recovered or recouped an amount equal to the amount of such obligation or part thereof so transferred during the year of assessment in which such obligation or part thereof has been so transferred
.

(m)    ……….

(n)     Where a taxpayer disposes of an industrial asset contemplated in section 12G or a manufacturing asset contemplated in section 12I before completion of the write off period of that asset for purposes of section 11(e), 12C or 13, as applicable, there shall be included in the taxpayer’s income, all amounts allowed to be deducted in respect of that industrial asset under section 12G or manufacturing asset under section 12I, whether in the current year or any previous year of assessment, which have been recovered or recouped during the current year of assessment, in addition to the inclusion of those amounts in terms of paragraph (a).

(nA)  Where, before 1 March 2026, a taxpayer disposes of an asset contemplated in section 12BA, there shall be included in the taxpayer’s income 25 per cent of the cost of that asset, which has been recouped during the current year of assessment, in addition to the inclusion of amounts in terms of paragraph (a), but limited to the total amount allowed to be deducted in respect of that asset.

[Paragraph (nA) inserted by section 4(1) of Act 17 of 2023 effective on 1 March, 2023 and applicable in respect of assets brought into use on or after that date]

(4A)   The provisions of subsection (4)(a), (e), (f) or (k) shall not apply in respect of any amount which is deemed to have been allowed as a deduction in terms of subparagraph (ix) of the proviso to section 11(e), section 12B(4B), section 12C(4A), section 12D(3A), section 12DA(4), section 12F(3A), section 13(1A), section 13bis(3A), section 13ter(6A), section 13quin(3) or section 37B(4).

Section 8 (ITA) – Certain amounts to be included in income or taxable income

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8.     Certain amounts to be included in income or taxable income

(1)

(a)

(i)   There shall be included in the taxable income of any person (hereinafter referred to as the “recipient”) for any year of assessment any amount which has been paid or granted during that year by his or her principal as an allowance or advance, excluding any portion of any allowance or advance to the extent that the allowance or advance or a portion of the allowance or advance is exempt from normal tax under section 10(1) or has actually been expended by that recipient—

 

(aa)   on travelling on business, as contemplated in paragraph (b), unless an allowance or advance has been granted by an employer in respect of the use of a motor vehicle as contemplated in paragraph 7 of the Seventh Schedule;

 

(bb)   on any accommodation, meals and other incidental costs, as contemplated in paragraph (c), while such recipient is by reason of the duties of his or her office or employment obliged to spend at least one night away from his or her usual place of residence in the Republic; or

 

(cc)   by reason of the duties attendant upon his or her office, as contemplated in paragraph (d).

[Sub­paragraph (i) amended by section 6(a) of Act 34 of 2019]

 

(ii)     There shall not be included in the taxable income of a person in terms of the provisions of paragraph (a)(i), any amount paid or granted by a principal in reimbursement of, or as an advance for, any expenditure incurred or to be incurred by the recipient –

 

(aa)

(A)    on the instruction of his or her principal; or

(B)    where the recipient is allowed by his or her principal to incur expenditure on meals and other incidental costs while such recipient is by reason of the duties of his or her office or employment obliged to spend a part of a day away from his or her usual place of work or employment, not exceeding an amount determined by way of notice in the Gazette,

in the furtherance of the trade of that principal; and

[Item (aa) substituted by section 4(1)(a) of Act 23 of 2020 effective on 1 March, 2021 and applicable in respect of years of assessment commencing on or after that date]

 

(bb)   where that recipient must produce proof to that principal that such expenditure was wholly incurred as aforesaid and must account to that principal for that expenditure:

 

Provided that where that expenditure was incurred to acquire any asset, the ownership in that asset must vest in that principal.

(iii)    For the purposes of this paragraph, ‘principal’ in relation to a recipient includes his or her employer or the authority, company, body or other organisation in relation to which any office is held, or any associated institution, as defined in the Seventh Schedule, in relation to such employer, authority, company, body or organisation.

 

(iv)    The provisions of this paragraph shall not apply in respect of any amount paid or granted as an allowance or advance that is received by or accrued to a person in respect of-

 

(aa)   the holding of a public office by that person as contemplated in section 9(2)(g);or

 

(bb)   services rendered or work or labour performed by that person as contemplated in section 9(2)(h),

 

if that person is stationed outside the Republic and that amount is attributable to services rendered by that person outside the Republic.

(b)     For the purposes of paragraph (a)(i)(aa) –

 

(i)      any allowance or advance in respect of transport expenses shall, to the extent to which such allowance or advance has been expended by the recipient on private travelling (including travelling between his or her place of residence and his or her place of employment or business or any other travelling done for his or her private or domestic purposes), be deemed not to have been actually expended on travelling on business;

[Subparagraph (i) amended by section 4 of Act 96 of 1985, section 9 of Act 129 1991 and section 5 of Act 43 of 2014 effective on 20 January 2015]

 

(ii)   subject to the provisions of subparagraph (iii), where such allowance or advance has been paid to the recipient in order that it may be utilized for defraying expenditure in respect of any motor vehicle used by the recipient, the portion of the allowance expended by the recipient during the year of assessment for business purposes shall, unless an acceptable calculation based on accurate data is furnished by the recipient, be deemed to be an amount calculated by applying the rate per kilometre determined in the manner prescribed by the Minister of Finance by notice in the Gazette for the category of vehicle used, on a distance travelled during the said year for business purposes (other than private travelling as contemplated in subparagraph (i)): Provided that where an allowance or advance is deemed to have accrued under section 7B to the recipient in the year of assessment during which that allowance or advance is paid, the distance travelled for business purposes in respect of which that allowance or advance is received shall be deemed to have been travelled during the year in which that allowance or advance is paid;

[Sub­paragraph (ii) substituted by section 6(a) of Act 85 of 1987 and amended by section 9(b) of Act 129 of 1991, by section 8(1)(a) of Act 21 of 1995, by section 6(1)(a) of Act 28 of 1997, by section 24(1) of Act 30 of 1998, bysection 4(a) of Act 9 of 2005, by section 21 of Act 9 of 2006, by section 11(1)(a) of Act 17 of 2009, by section 10(1)(b) of Act 7 of 2010 and by section 6(b) of Act 34 of 2019]

(iii)  where such allowance or advance is based on the actual distance travelled by the recipient in using a motor vehicle on business (excluding the said private travelling), or such actual distance is proved to the satisfaction of the Commissioner to have been travelled by the recipient, the amount expended by the recipient on such business travelling shall, unless the contrary appears, be deemed to be an amount determined on such actual distance at the rate per kilometre fixed by the Minister of Finance by notice in the Gazette for the category of vehicle used: Provided that where an allowance or advance is deemed to have accrued under section 7B to the recipient in the year of assessment during which that allowance or advance is paid, the distance travelled for business purposes in respect of which that allowance or advance is received shall be deemed to have been travelled during the year in which that allowance or advance is paid;

[Sub­paragraph (iii) amended by section 6(c) of Act 34 of 2019]

 

(iiiA)  where the portion of the allowance or advance which is claimed by the recipient to be actually expended is calculated based on accurate data furnished by the recipient in respect of any vehicle –

 

(aa)   in the case of a vehicle that is being leased, the total amount of payments in respect of that lease may not in any year of assessment exceed an amount of the fixed cost determined by the Minister in the notice contemplated in subparagraph (ii), for the category of vehicle used;

 

(bb)   in any other case –

 

(A)    the wear and tear of that vehicle must be determined over a period of seven years from the date of original acquisition by that recipient and the cost of the vehicle must for this purpose be limited to R800 000, or such other amount determined by the Minister by notice in the Gazette; and

[Sub-item (A) substituted by section 5(1) of Act 42 of 2014, by section 6(1) of Act 14 of 2017, by section 5(1) of Act 22 of 2020 and by section 5(1) of Act 19 of 2023 effective on 1 March, 2023 and applicable in respect of years of assessment commencing on or after that date]

(B)    the finance charges in respect of any debt incurred in respect of the purchase of that vehicle must be limited to an amount which would have been incurred had the original debt been R800 000, or such other amount determined by the Minister in terms of subitem (A);

[Sub-item (B) substituted by section 5(1) of Act 42 of 2014, by section 6(1) of Act 14 of 2017, by section 5(1) of Act 22 of 2020 and by section 5(1) of Act 19 of 2023 effective on 1 March, 2023 and applicable in respect of years of assessment commencing on or after that date]

 

(iv)    where any motor vehicle which is owned or leased by an employee, his spouse or his child, whether directly or indirectly by virtue of an interest in a company or trust or otherwise, has been let to the employer or any associated institution in relation to the employer, the sum of the rental paid by the employer or associated institution and any expenditure defrayed by the employer or associated institution in respect of the vehicle, shall be deemed to be an allowance paid to the employee in respect of transport expenses, and in such case the said rental shall for the purposes of this Act (excluding this paragraph) be deemed not to have been received by or to have accrued to the lessor of such motor vehicle, and for the purposes of paragraph 2 (b) of the Seventh Schedule such employee shall be deemed not to have been granted the right to use such motor vehicle.

 

(c)     A recipient shall, for the purposes of paragraph (a)(i) (bb), be deemed to have actually expended, –

 

(i)      where that recipient proves to the Commissioner the amount of the expenses incurred by him or her in respect of accommodation, meals or other incidental costs (other than any amount of expenditure borne by the employer otherwise than by way of payment or granting of the allowance), the amount so actually incurred but limited to the amount of the allowance or advance paid or granted to meet those expenses; or

 

(ii)     for each day or part of a day in the period during which that recipient is absent from his or her usual place of residence, such amount in respect of meals and other incidental costs, or incidental costs only, as the Commissioner may determine for a country or region for the relevant year of assessment by way of notice in the Gazette, but limited to the amount of the allowance paid or granted to meet those expenses: Provided that this subparagraph does not apply to the extent that –

 

(aa)   the employer has borne the expenses (otherwise than by way of granting the allowance or advance) in respect of which the allowance was paid or granted for that day or part of that day; or

 

(bb)   the recipient has proved to the Commissioner any amount of actual expenditure in respect of meals or incidental costs for that day or part of that day, as contemplated in subparagraph (i).

 

(d)     Any allowance granted to the holder of any public office contemplated in paragraph (e) to enable him to defray expenditure incurred by him in connection with such office shall for the purposes of paragraph (a) be deemed to have been so expended by him to the extent that expenditure relevant to such allowance and not otherwise recoverable by him has actually been incurred by him for the purposes of his office in respect of –

 

(i)      secretarial services, duplicating services, stationery, postage, telephone calls, the hire of office accommodation and the maintenance of such accommodation;

 

(ii)     travelling;

 

(iii)    hospitality extended at any official or civic function which the holder of such office is by reason of the nature of such office normally expected to arrange;

 

(iv)    ……….

 

(v)     subsistence and incidental costs incurred in the circumstances contemplated in paragraph (c).

 

(e)     For the purposes of paragraph (d) the holder of a public office includes –

 

(i)      the President, Deputy President, a Minister, Deputy Minister, a member of the National Assembly, a permanent delegate to the National Council of Provinces, a Premier, a member of an Executive Council or a member of a provincial legislature;

 

(ii)     any member of a municipal council, a traditional leader, a member of a provincial House of Traditional Leaders and a member of the Council of Traditional Leaders; and

 

(iii)    a person occupying the office of president, chairman or chief executive officer of any non-profitmaking organization which is organized on a national or regional basis to represent persons with common interests and the funds of which are derived wholly or mainly from subscriptions of members or donations from the general public.

 

(f)      Where it is expected of any person contemplated in paragraph (e) (i) to defray any expenditure referred to in paragraph (d) out of his salary received as the holder of any public office, an amount equal to a portion (which shall be determined by the National Assembly or the President, as the case may be, as provided for in the Remuneration of Public Office Bearers Act, 1998 (Act No. 20 of 1998)) of such salary shall for the purposes of paragraph (d) be deemed to be an allowance granted to such person.

 

(g)     Where, during any year of assessment, any person contemplated in paragraph (e) has held a public office for less than 12 months, the amount determined in terms of paragraph (f), shall be reduced to an amount which bears to the relevant amount, the same ratio as the number of months (in the determination of which a part of a month shall be reckoned as a full month), for which the office was held bears to 12 months.

(2)     ……….

(3)     ……….