18A Tax Certificate Issue Policy

18A Tax Certificate Issue Policy

Background:

On 18 June 2008 SARS granted approval to Imisebe Yethemba (Association Incorporated under Section 21) (“IY”) for exemption from taxes and duties and section 18 A approval. The approval allows that donations to IY can be treated as tax deductable in the hands of the donors in terms of and subject to certain limitations prescribed in section 18A of the Income Tax Act.

Purpose:

The section 18A approval was granted to IY on a limited basis and prescribes certain expenses for which IY may issue certificates (“Qualifying Specified Activities”) and certain expenses for which IY may not issue certificates (“Non Qualifying Specified Activities”) (See Appendix A for Specified Activities)

The purpose of this policy is to ensure that no tax certificates are issued in contravention of our approval from SARS.

Policy:

The following policy will apply for the issue of every tax certificate:

1. No tax certificate will be issued for physical goods donated;
2. Record will be kept of Qualifying Specified Activities and Non Specified Activities;
3. A calculation will be done to determine available Tax Base, calculated as the cumulative Rand value spend on Qualifying Specified Activities minus the Rand amount of tax certificates issues during each Financial Year. No Tax certificate will be issued if this will result in the Tax Base decreasing below zero;
4. Every tax certificate will be signed by both the Treasurer and the Chairman;
5. Every tax certificate will be issued on the template attached as Appendix B, and a copy of the signed certificate will be kept on file;
6. No tax certificate will he issued unless the Tax Certificate Questionnaire (attached as Appendix C) is completed, signed and no question contains a “No” answer. The Tax Certificate Questionnaire will be attached to the copy of the original certificate; and
7. No tax certificate will be issued for funds not received directly into an IY bank account;

Appendix A

Non Qualifying Specified Activities:

Qualifying Specified Activities:

Appendix B

Appendix C

18A Tax Certificate Issue Questionnaire

Certificate Number______

Signed ______

Date ______