2 June 2021
The SA Revenue Service has withdrawn proposals to scrap tax relief on school fees for children with special needs. Graphic: Lisa Nelson
The South African Revenue Service (SARS) has decided to withdraw draft proposals to scrap tax relief on school fees for children with special needs.
The draft proposals, which were open for public comment for just over ten days, were withdrawn after SARS noted that “many of these comments appear to be based on a misunderstanding of the intent of the proposed amendments to the list”, it said in a statement on Tuesday.
The draft proposals received backlash from parents, with an online petition collecting nearly 12,000 signatures.
“In order to permit more time to engage with stakeholders, explain the intent behind the changes and understand the concerns raised, the decision has been taken to withdraw the draft Disability List,” the SARS statement read. The list contains expenses which can be claimed as tax relief.
The draft proposed scrapping tax relief on private and public special needs education as well as on the cost of a school assistant, if this is not included in the school fees, and of extra tutoring services for children with special needs.
“School fees are not in consequence of a disability, but in consequence of education. For this reason, school fees will not qualify as a medical expense under this List,” SARS said in the draft proposals.
But a day after the period for public comment closed, SARS said that the drafts would be withdrawn and it would first engage with the public before new drafts are published.
The problem dates back to amendments SARS made in 2020, which it was trying to rectify with these new amendments, according to Sharon Smulders, tax advocacy project director at the South African Institute of Chartered Accountants (SAICA).
The 2020 amendments established that the qualifying expense is the “difference between the fees paid to a private special needs school and closest fee-paying private school or the difference between the fees paid to a public special needs school and closest fee-paying public school”, according to SARS.
Smulders said that while SAICA welcomed the recent decision to withdraw the drafts, SARS actually had to withdraw the 2020 amendments too, since some taxpayers would still be disadvantaged. She said because of the lack of public schools for children with special needs, many parents had to go to private schools. This meant that they would not be entitled to any deduction, “just because of the area that they live in and the high cost of certain schools in that area,” she said.
SARS has said that the list of qualifying expenses for tax relief published in 2020 would remain in place.