The Democratic Alliance has proposed changes to the Income Tax Act to allow deductions for home office expenses for all periods worked at home during the lockdown.
DA Shadow Minister of Finance Geordin Hill-Lewis said this should include expanding the definition of a home office to include any workspace used, or a deemed portion of a home.
‘Expenses such as rent, interest on mortgage bond, repairs to the premises, rates and taxes, cleaning, wear and tear and all other expenses relating to the house, internet connectivity, telephone, stationery and repairs to printers should be permissible deductions.
‘Any capital gains tax implications on the sale of the house for which deductions are claimed during lockdown should be waived.’
Hill-Lewis said that, under lockdown conditions, ‘many taxpayers are required to work from home and have already seen a reduction in their earnings as companies deduct pay for days not worked and not covered by available leave balances, or limit the number of days worked’.
This was ‘creating financial hardship that requires urgent intervention’.
The DA also proposed that, during any lockdown period, a deemed amount of travel should be added to the deductible kilometres travelled or that the deductible amount per kilometre travelled be increased for the period of the lockdown.
‘Although these tax relief measures will lighten the burden on our already overtaxed citizens, a much bolder intervention is required to enable Pension Fund members to access accumulated pension assets without requiring a disinvestment from the market.
‘Pension Fund (including Retirement Annuity) members must be enabled to leverage their accumulated financial asset as the crisis bites into household cash flows.
‘Disinvesting via a partial withdrawal at this time would lock in significant, most probably temporary, declines in value and would also attract punitive tax deductions. Accessing the funds at this time thus comes at a significant cost to members and puts their financial well-being in retirement at greater risk than it is already.
‘To leverage accumulated pension assets without making a withdrawal, the DA will propose a private members’ bill to amend section 19 (5) of the Pension Funds Act of 1956 to extend pension-backed loans. Currently, Pension Funds are permitted to provide collateral for housing loans only.’
First published on Daily Friend