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South Africa: New royalty tax system; implications for mining industry

South Africa: Royalty tax system; mining industry

The South African Revenue Services (SARS) is introducing a new system for the royalty tax.


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At SARS-sponsored training sessions with taxpayers in the mining industry, it was revealed that the new royalty tax system will be phased in, according to the following schedule:

  • Effective immediately, a new MPR3 form replaces the current versions of forms MPR2 and MPR3. 
  • Effective 7 December, the roll-out of unique identification tax numbers for royalty purposes will commence. 
  • Also 7 December has been set as the date when the “back office” functionality of the new tax system will go live. SARS will capture a balance as of 1 January 2017 on the new system, and for the following period, transactional detail will be processed. 
  • Effective 1 February 2019, all royalty tax payments will need to be made via an e-filing profile. 
  • Effective September 2019, royalty tax returns must be submitted on-line, and taxpayers will have an e-account and statement of account functionality.

KPMG observation

Concerning the “take-on balances,” manual reconciliations from 2010 and incomplete records (including royalty tax returns and payment information) may result in inaccurate take-on balances as of the 1 January 2017 capture date. The burden to determine the accuracy of the take-on balance rests with the taxpayer. Thus, taxpayers may want to consider engaging with SARS about this information. Ideally, SARS would apparently prefer confirmation from the taxpayer prior to the issuing of the unique reference number. 


Read a December 2018 report [PDF 88 KB] prepared by the KPMG member firm in South Africa

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